In the age of digital music, it can be hard to figure out how musicians can make money with their music. Hardly anyone’s dealing in CDs these days, and nearly everything’s in digital form on streaming services. Without a physical product that you can sell, you may be wondering how you make a living as a musician. It may seem like you are just giving away your hard-worked music for free, but in reality, you can make a decent amount of money from the ever-expanding music streaming business. In this article, we’ll explain how much music streaming services pay musicians for their music. Even if you aren’t a musician, you’ll learn more about how your favorite artists make money every time you listen to their songs
What is Streaming?
Streaming has become the most popular way of listening to music. Most music is now consumed through streaming services such as Spotify and Apple Music. These streaming services are accessed through a web browser or an app. Streaming is 100% online and always requires some sort of internet-connected device.
Some of the most popular streaming services are:
- Apple Music
- Amazon Music
- YouTube Music
How Do Streaming Services Pay Musicians?
Streaming services pay musicians a flat fee for every stream. For example, every time a consumer streams a musician’s song, the streaming platform will pay royalties to the rights holder. Streaming platforms often pay less than a penny per stream. That doesn’t seem like a lot, though it does add up.
It’s not as simple as pay-per-stream, though. Streaming royalties are a bit more complicated than just x amount of money per stream. A variety of factors impact how much a royalty payment will be. Some of those factors will be the country where the consumer is listening, whether they have a free or a paid account, and relative rates for pricing and currency. Streaming services make their money from paid subscriptions and ads. For example, a premium subscription to Spotify costs USD 9.99 in the United States, while in India, it only costs USD 1.70. The difference in pricing can affect how much a musician will make in streaming payouts.
While figuring out how much you as a musician will make can vary, you can get a general idea of how much you can earn based on how much each streaming platform pays.
The following is a royalty calculation breakdown of the most prominent digital music service providers. Remember that this is a rough estimate and that other factors will play into how much money you can earn.
Apple Music is one of the largest music streaming companies. Users can start with a 3-month free trial, but they must pay for a subscription after that. Apple Music pays approximately $.007-$.008 per stream, which means it takes 128 streams to earn $1.
Apple Music also pays its musicians a large portion of the revenue they make from ads. This money is divided amongst all the artists on the platform. The bigger the musician, the more money they’ll get from ad revenue. Most musicians can expect to receive 58 cents for every dollar earned by Apple Music in ad revenue.
Spotify is one of the giants in the music streaming industry. Users can get a free subscription with ads, or a paid subscription that takes away ads. Spotify used to be one of the lowest-paying platforms, but they have recently stepped up to raise their royalty rates. Spotify pays $.003-$.005 per stream, depending on a few factors, including the listener’s location and the song’s popularity and length. It takes about 229 streams to make $1. Spotify also pays its musicians a percentage of their ad revenue, but typically only the most famous artists receive that money.
It’s not surprising that Amazon now has its own music streaming service, considering that it has dabbled in nearly every industry. It’s newer to the scene but is slowly gaining in popularity. Amazon Music offers five different ways to listen: unlimited, high-definition audio, individual, family, and premium. Amazon Music pays about $.004-.005 per stream. An artist must reach about 248 streams to get to $1.
Pandora has been known as a leader in internet radio for many years. Users can create their own custom radio stations based on one particular artist, song, or genre. Pandora is free with ads, but users can also purchase an ad-free version for $5 per month, or an on-demand music library for $10 per month. Pandora pays $.001-$.002 per stream, meaning an artist must get around 752 streams to reach $1.
YouTube now has its own music streaming service. It is free to use with ads, or users can purchase an ad-free premium subscription. YouTube offers several different streaming options for musicians. Musicians can make money from having their music played in the background of someone else’s video, which is about $.0008-$.0009 per stream. Musicians can stream their music on their own channels for around $.001-$.002 per stream. Or they can stream on the YouTube Music platform and get around $0.008 per stream.
While music streaming platforms seemingly do not pay a lot for streams, it surely can add up when a track gains popularity or goes viral. In the meantime, how can we best support our favorite artists? You can tell a friend, attend their concerts, buy their CDs, and buy their merchandise. But don’t forget to keep on streaming! Hopefully, the more popular streaming becomes, the more platforms will be able to pay their musicians.