Why Spotify Pays Artists Less Per Stream Than Apple Music

One band. One album. Twelve months of streaming. Apple Music gave them one point four million plays and six and a half thousand pounds. Spotify gave them three quarters of all their streams... and about twenty thousand.

Okay, those sound like big-ish numbers until you do the division.

Do the division. Per stream, Apple paid them sixty-two percent more. Same song. Same person pressing play. Different app.

Why would the app change what the artist gets? It's the same three minutes.

That's the question. And the answer isn't greed, exactly. It's arithmetic you can do on a napkin. Hold onto it, because it ends with Taylor Swift re-recording six albums for reasons that only make sense once you've seen the napkin.

I'm suspicious of napkin maths. Go on.

First myth to kill. Nobody pays per stream. Spotify says it bluntly themselves... no streaming service pays per stream. What actually happens is called pro rata. Every month the service takes its revenue, hands roughly two thirds of the music money to the industry, and divides that pot by total plays.

So the rate is just... pot, divided by plays.

Which means the rate isn't a price. It's a leftover. And here's where Apple wins without trying. Apple Music has no free tier. Every single stream on it comes from someone paying a subscription.

Oh. Oh, that's the whole trick. Spotify's got hundreds of millions of people listening for free, and all those plays land in the same denominator.

Straight in the denominator. Ads bring in far less per listener than a subscription. So the pot grows slowly, the plays grow fast... and everybody's rate sinks together.

Put a number on it for me.

A company called Duetti went through real royalty statements from independent artists for twenty twenty-four. Spotify, three dollars per thousand streams. Apple Music, six dollars twenty. Amazon Music came out highest of the big platforms, eight dollars eighty.

Three dollars. A thousand human beings listen to your song, and you can't buy lunch.

And that's before your distributor takes about fifteen percent. An indie artist nets maybe a quarter of a cent a play. To clear a thousand dollars you need somewhere between two hundred thousand and three hundred and thirty thousand streams.

That's several stadiums. For a grand.

Spotify's defence is scale. They paid the music industry more than eleven billion dollars in twenty twenty-five. A small slice of an enormous pie, they'd say, beats a fat slice of a tiny one.

True for the industry. Less comforting if you're the person who wrote the song.

And in April twenty twenty-four it got starker. New rule... a track has to hit a thousand streams in twelve months before it earns anything at all.

Nothing? Not a penny?

Zero. Spotify's reasoning is that those tracks make about three cents a month on average, and account for half of one percent of all streams. Money that mostly evaporates in transaction fees. So they pool it and push it upward.

Upward meaning... toward the artists who already have the streams.

Tens of millions a year, redirected. Musicians' unions were furious. Spotify would say they're protecting the pot from people slicing white noise into thirty-one-second tracks to farm royalties.

And both of those are true at once, annoyingly.

They are. Which brings me back to the person who worked all this out before almost anyone.

Taylor.

November twenty fourteen. She pulls her whole catalogue off Spotify. The fight was about nineteen eighty-nine... she wanted it available only to paying subscribers. Spotify said no. She left for nearly three years.

She was arguing about the denominator before anyone called it that.

Came back at midnight New York time, June ninth, twenty seventeen, after the album passed ten million sales. Then she lost the bigger fight. Twenty nineteen, Scooter Braun's company buys Big Machine, and with it the masters of her first six albums. Her worst-case scenario, she called it. She accused him of manipulative bullying.

And the answer was re-recording everything? That always sounded unhinged to me.

It sounds unhinged until you remember the rate is a leftover, and the owner takes the leftover. She announced it August twenty nineteen. Then on Good Morning America she said Fearless, Taylor's Version was done... twenty-six songs, six never released. Her line was simple. Artists should own their own work.

So every stream that shifts from the old version to hers changes whose pocket it lands in.

She rebuilt her catalogue from scratch so the plumbing pointed at her. And she eventually bought the originals back anyway.

Fine. But nobody else can re-record their way out of this.

No. What they can do is tell you where to listen. Because here's the bit you can act on tonight... your subscription is not a tip jar for the band you love. It's a vote thrown onto a pile, and the pile gets divided by everybody's listening. Including the people paying nothing.

So the free tier I keep recommending to my mates is quietly diluting the artists I'm recommending.

A little. A ticket, a T-shirt, a paid account... all worth more than a thousand plays. Streaming never made music free. It just moved the cost somewhere you can't see it.