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Streaming Revenue

Music Royalties

As artists, we are constantly wondering why we are not making what we feel we should be on our digitally released music.  Even if we have what we feel is a large number of listeners on streaming sites, our streaming revenue seems so small.

For an artist to make the minimum wage from, for example YouTube, he or she would have to rack up 2.1 million plays. For Spotify, the number is lower, but still sizable at 366,000 plays to make minimum wage money.

Types of Streams

To sort out what you can expect from streaming revenue, it’s important to know that there are two kinds of streams – non-interactive or webcast (Pandora is one example) and interactive or on-demand (i.e. Spotify). On-demand generates more money, and thus pays more. There are also two tiers for each stream – premium or paid subscribers and freemium or ad-supported subscribers. The paid level usually generates more money than ad-supported stream

Even the breakdown of the highest-paying streaming services can be confusing. While Napster pays artists the highest percentage of royalties at $0.0167 per play, the company only has 1.75 percent of the market. You may get a higher percentage for each play, in other words, but the number of plays may be small compared to, say, Spotify or Apple Music. Reaching the number of plays you need to make the minimum wage is hampered by the low number of subscribers.

Factors That Affect Streaming Revenue

Music streaming services like Spotify, Apple Music, Deezer, Tidal and Amazon don’t have a fixed “pay-per-stream” rate when it comes to paying out music royalties to artists.

There are lots of factors that affect how much money one stream is worth in royalties. The main factors include:

– The listener’s country and location

– Whether the listener has a paid subscription or free account

– The specific artist’s royalty rate

– The relative pricing & currency in different regions

Overall Breakdown by DSP

Though the numbers are a best estimate from several sources, they give a good idea of how much (or how little) songwriters can expect from their streaming revenue. The estimated payouts include:

It’s easy to get frustrated when you don’t feel you are making what you should. There are many ways to increase your royalties. Don’t expect your income to only be based on online sales and royalties.

For more information on ways to make money on your music, visit our information page on licensing.

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