- 19 Apr 21
Much of the Apple Music memo seems to be placing them in direct contrast to their rival, Spotify.
Apple Music has issued a memo to artists, labels, and other rights holders in regard to its royalty and payout practice. It claims the platform pays out a penny-per-stream average, as The Wall Street Journal reports.
“While royalties from streaming services are calculated on a stream share basis, a play still has a value,” the memo reads. “This value varies by subscription plan and country but averaged $0.01 for Apple Music individual paid plans in 2020. This includes label and publisher royalties.”
A bulk of the memo appears to be designed to criticise the platform's primary competitor, Spotify, according to the Journal and Pitchfork. Apple stresses their commitment to paying a blanket 52% headline rate to all labels.
“While other services pay some independent labels a substantially lower rate than they pay major labels," the memo notes, "we pay the same headline rate to all labels. This means artists can distribute music however they like, knowing Apple Music will pay the same rate. Sign with a label or stay independent; we believe in the value of all music.”
Apparently, the memo also refers indirectly to Spotify’s Discovery Mode – a feature which gives artists the option to participate in a promotional, lower royalty rate in order to raise streams from personalized algorithmic playlisting.
“We believe in paying every creator the same rate," the memo says," that a play has a value, and that creators should never have to pay for featuring.
“Apple Music’s team of global tastemakers hand-curate 30,000 editorial playlists. These tastemakers select music based on merit and we do not ask anyone to accept a lower royalty rate in exchange for featuring. The same is true for Apple Music’s personalized playlists and algorithmic recommendations.”
Streaming companies like Apple Music and Spotify do not pay artists directly, paying out royalties instead to record labels, performing rights organisations, and distributors, who then in turn pay artists.
Apple also shared in the memo findings from research into "alternative royalty models". “Our analysis has shown that they would result in a limited redistribution of royalties with a varied impact to artists,” the memo reads. “Per play rates would cease to be the same for every play of a song. But more importantly, the changes would not increase what all creators earn from streaming. Instead, these changes would shift royalties towards a small number of labels while providing less transparency to creators everywhere.”
At the moment, creators in the music industry are calling for streaming services like Apple and Spotify to pay artists fairly. Spotify has been the main target of outrage, with United Musicians and Allied Workers (UMAW) launching a 'Justice at Spotify' campaign back in October. Spotify has more users than Apple Music, with 155 million paid subscribers, compared to Apple's 60 million as of 2019. The campaign called on Spotify – who launched their 'Loud & Clear' transparency initiative last month in an effort to open lines of communication between artists and the platform – to pay out a penny-per-stream. Meanwhile, Bandcamp has been making sure artists get a fair shake during Covid, by waiving its revenue shares on the first Friday of every month, to give artists on the platform 100% of the profits from purchases of music or merchandise.