But Apple Music’s superior per-stream payments don’t come because it gives labels and artists a better deal than Spotify. In fact, the formula that Apple Music uses to pay creators and labels is almost exactly the same as that Spotify uses for its paid subscribers.
Higher payouts come because of differences between users of Apple Music and those who use Spotify.
Spotify has a free ad-supported tier and Apple Music only has paid subscribers. Ad-supported users contribute far less to royalty payments as well to Spotify’s bottom line.
It’s also long been believed that the average Apple Music subscriber listens to less music than the average Spotify user.
Many Apple Music subscribers chose the service because come’s preloaded on their phone and other Apple products. Downloading, using, and paying for Spotify is a conscious choice often made by a more serious fan of music.
Apple’s letter also only refers to individual plans and did not break down how much it pays for streams on Family or on other discounted plans.
- Apple Music paid an average of $0.01 per stream for individual paid plans last year
- Apple Music paid the same 52% of revenue rate to all labels regardless of their size
- 2020 royalties were paid for more than 5 million recording artists worldwide
- The number of artists generating recording and publishing royalties over $1 million per year increased more than 120% since 2017
- The number of artists that generate more than $50,000 per year has more than doubled in the same time period.