Making Cents of Music Streaming Services

The payments doled out by streaming services are a hot button topic in the music industry. Taylor Swift made waves when she removed her music from Spotify, citing that the platform didn’t pay artists fairly. While she eventually allowed her music back onto the platform, her initial decision exposed the dark side of the streaming trend that can hurt artists. Especially those who rely on music sales to get by and further their career. There are pros and cons to these accessible music platforms, and we’re taking a closer look at:

  • Who the big players are.

  • How payments are determined.

  • What you can do to increase your number of streams.

  • How to totally conquer the music streaming world!

Who Are The Streaming Giants?

Spotify, YouTube, and Apple Music are the top tier streaming giants, with Google Play Music, Tidal, and Amazon Music right behind them. Lower in popularity, but still paying out, are Pandora, Deezer, and Napster. Spotify leads the pack with number of paid users at a whopping 87.5 million listeners. YouTube is in second place with over 50 million, and Apple Music has 36 million.

Unfortunately, every single one of these streaming services pays their artists differently, which can be all the more frustrating when calculating your royalties. So, why do artists continue to stream?

Why Do Artists Use Streaming Services?

For one, streaming provides an unlimited library of music to listeners, and you can imagine that with Spotify’s 87 million users that library is being well-used and increases your chances of being discovered. This can be a game-changer for independent artists!

Secondly, it’s relatively easy to upload new music and start earning, even if the payout isn’t the best - some payout is often better than no payout. Third, many artists themselves use Spotify at leisure or to find inspiration, and it wouldn’t be fair to enjoy the service, then deny their own fans from listening to their songs.

How Much Do Music Streaming Services Pay?

If you do a quick online search of this question, the answer may vary greatly. Spotify alone pays about $0.006 to $0.0084 per stream to the “rights holder.” If you remember our lesson about splitting royalties, being the “rights holder” can include the record label, producer, songwriter, and the artist. When that tiny amount is split up that way, it only makes pennies for the artist.

You may be asking, then what determines how much you get per stream? It actually depends on a lot of factors:

  • Country and location where the listener is.

  • That area or region’s currency.

  • Free accounts vs paid subscriptions.

  • The artist’s royalty rate.

Taking all those factors into account, the formula that these streaming services use is a mystery. Using the Spotify numbers as an example, say the $0.0084 per stream, an artist would need their song to be played 120,000 times just to make around $1,000. In addition, streaming services tend to payout on a quarterly basis, which could mean waiting a few months to see your revenue.

How to Increase Your Music Streaming Plays

Okay, okay, we don’t want to leave you feeling down on yourself. We know those numbers don’t look very awesome, BUT there is a silver lining. By engaging closely with your fans, you can greatly increase your fanbase, and in turn increase your number of streams per song. Here’s just a few ideas to get you started:

  • Paid Social Media Blasts: Who are we kidding, of course you have social media! It’s often the first point of contact between artists and their fans, so it’s the quickest way to let your fans know the exciting news. However, it won’t help if you constantly shout to just the same old followers. Paid Facebook ads are another way to reach potential new fans, with a targeted, intriguing campaign to market your new song.

  • Email Blasts: We’ve taught you about building a fanbase and collecting emails, and now it’s time to take advantage of your robust mailing list. Send a blast out to your fans and tell them all about your new music, the inspiration behind it, and where they can find it.

  • Incentives: An incentive doesn’t always have to be monetary. One example is you can hold campaigns such as retweeting or liking a post, and a random person will receive a free copy of your latest album.

  • Sneak Peeks: By allowing your fans some small insights to your creative process, it’ll create a deeper connection to the song that they’ll want to replay over and over.