Apple Music has issued a memo to artists, labels and other rights holders regarding royalties and practices in which the streaming service announces that it pays an average of one cent per stream, the Wall Street Journal reports and Pitchfork can confirm.
“While the license fees for streaming services are calculated on the basis of stream shares, a game still has a value,” says the memo considered by Pitchfork. “This value varies by subscription and country, but averages $ 0.01 for individual paid Apple Music plans in 2020. This includes license fees for labels and publishers.”
Much of the memo appears to be indirectly addressed to its main competitor, Spotify. At one point, Apple reiterates its commitment to pay all labels the same 52% headline rate. “While other services pay a much lower rate to some independent labels than to the big labels, we pay the same headline rate to all labels,” the memo says. “This means that artists can distribute music however they want, knowing that Apple Music pays the same price. Sign with a label or be independent; We believe in the value of all music. “
The memo appears to be referring to Spotify’s Discovery Mode, which gives artists the option to opt for a lower advertising fee in order to enhance the personalized algorithmic playlist.
The memo states, “We believe that every creator gets the same price, that a piece has value, and that the creators never have to pay for the feature.” It later says, “The Apple Music Global Flavorers team curates 30,000 hand-edited playlists. These tastemakers select music based on merit and we are not asking anyone to accept a lower royalty in exchange for the presentation. The same goes for Apple Music’s personalized playlists and algorithmic recommendations. “
It should be noted that streaming companies like Apple Music and Spotify don’t pay artists directly, but instead pay to record labels, distributors, and organizations for performing rights like ASCAP and BMI, who then pay artists. Towards the end, Apple also shared its findings from research into “alternative license fee models”.
“Our analysis showed that it would lead to a limited redistribution of royalties with varying effects on artists,” the memo says. “The rate per game would no longer be the same for every game of a song. More importantly, the changes don’t increase what all developers earn from streaming. Instead, these changes would shift royalties to a small number of labels and provide less transparency for developers everywhere. “
Apple’s announcement comes at a time when music industry artists are demanding a shift in streaming services to fairer license fees. The Union of Musicians and Allied Workers (UMAW) has campaigned for Spotify, which with 155 million paid subscribers has a far larger user base than Apple Music than Apple Music’s 60 million as of June 2019, to pay out a cent a month of electricity. In March, Spotify launched the Loud & Clear transparency initiative to facilitate more communication with the artist community.
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