Disclosure: We may receive commissions when you click our links and make purchases. However, this does not influence our reviews or ratings. We endeavor to keep our opinions fair and balanced to help you make informed buying choices.
How much does each streaming platform payout?
Use our streaming payouts calculator to see how much you can earn.
What is an ‘album equivalent unit’?
The greatest musicians in the world are rarely in it for the money. However, tour vans, broken guitar strings and studio time do not come free, so it certainly pays to be able to monetize music in some way or another.
Today, the majority of a modern musician’s income is made from paid performances, selling merchandise, and earning streaming royalties. Whereas CD’s, tapes, and vinyl are a thing of the past (except for the collectors out there), in 2020, most people listen to their music through a handful of online audio streaming platforms.
As many streaming services are low-priced and even free, this leaves many music lovers wondering how much the artists they listen to actually earn whenever one of their songs is streamed.
To answer this question and more, we’ve compiled this article, which contains everything you need to know about music streaming royalties and payouts in 2020.
Streaming Royalties Calculator
First of all, if you are looking for a fast and specific answer, feel free to use our free Streaming Royalties Calculator. Simply input the number of streams and the calculator will give you a breakdown and estimate of how much an artist can earn through royalties.
For example, if your next hit song reaches 10,000 plays on Spotify, you will receive roughly $40 in streaming royalties. Although this number is fairly accurate, calculating the exact payout from various platforms can be very difficult. This is largely because:
Rates are rarely paid at a flat rate per stream
Agreements and figures change often
Different tiers and subscriptions impact pay rate
Streams are more valuable in different parts of the world
What Are The Most Popular Streaming Services in 2020?
In 2020, the following the are most popular streaming services for listening to music, comedy, and podcasts all around the world:
Although there are always new companies emerging into this exciting space, these are 10 of the companies that make up the majority of the streaming real estate in 2020.
According to Statista.com, Apple Music is the most popular streaming platform with 49.5 million users on the platform every month. As a close second place, Spotify has roughly 47.7 million users each month.
The same report noted that Pandora brings in an impressive 35.8 million users, while SoundCloud is a close fourth with 34.2 million monthly users. What is notable here is that SoundCloud is one of the fastest growing platforms, doubling the amount of monthly users from previous years.
Whereas Apple, Spotify, Pandora and SoundCloud are used exclusively for audio streaming, YouTube (and YouTube Premium) is extremely popular for streaming music videos, songs, podcasts, and more. Amazingly, YouTube can draw as many as 2 billion monthly users listening to music, watching TV, or going down rabbit holes watching video after video on obscure subjects.
Royalty Payouts Per Platform In 2020
For a little bit more information about today’s streaming landscape, we will now go into detail about the ins and outs of each of these streaming platforms.
To make things confusing, Amazon music offers 5 different tiers of listening options. This includes an unlimited version, a high definition audio version, as well as individual and family plans. Amazon Prime members are also entitled to a premium version of Amazon Music.
How much do artists earn on Amazon Music?
On average, Amazon Music shells out roughly $0.0082 per stream on the platform to the owners of the recording. At nearly one full cent, this is among the highest royalty payments for music streaming services globally.
From the other side of the world, Sweden’s Spotify is another industry giant in the music streaming space. Spotify offers both a free and paid service which can be used to listen to music on desktop and mobile devices. The free version contains ads between groups of songs, whereas Spotify Premium is completely ad free.
How much does Spotify pay per stream?
Historically, Spotify has accounted for some of the lowest royalties paid in the industry. In fact, on multiple occasions, artists have banned together claiming that platforms like Spotify are not paying nearly enough. Wanting to stay in business, the streaming service has modernized to raise performance royalties for musicians and comedians.
Today, Spotify pays between $0.003 and $0.005 per stream based on the listener’s location, song popularity, song length, and a few other factors. In many ways, the ever-changing rate of pay seems as if it was almost designed entirely to confuse users who are possibly being underpaid for their royalty rates.
Like Apple, Spotify also shares a percentage of its ad revenue with its most popular streaming artists. The platform has also made headlines recently for spaying independent producers like Joe Rogan large sums of money in exchange for exclusive streaming rights.
Okay, let’s start with the company who revolutionized the way we listen to music with the invention of the iPod: Apple Music. Today, most Apple Music users stream their favorite tunes from the Apple Music App on iPhones, iPads and MacBook computers.
Users can begin with Apple Music by utilizing a 3-month free trial. After that, the service costs $10 per month for individual users, $5 per month for students, and $15 per month for families of up to six people. For more information on the different tiers, visit Apple Music’s official website.
How much does Apple Music pay per stream?
Although the number is constantly fluctuating, in 2020, Apple Music pays 0.00783 per stream on its platform. With this in mind, a song will earn $1 after streaming roughly 128 times.
Beyond this, Apple Music also has a pro-rata system that distributes a large percentage of its advertising revenue to streaming artists. However, this bonus payment is usually pennies on the dollar for most artists, as income is divided among all of the musicians on the platform. Significant amounts of money are only going to be made through ads from artists like Drake and Taylor Swift who’s songs are streamed millions of times each month.
For every dollar earned on Apple Music, artists earn an average of 58 cents. The remaining balance is split between Apple’s commission (28.5 cents), and production, mechanicals, and performance rights (13.5 cents).
For many years, Pandora was a name that was fairly synonymous with internet radio. The platform lets users customize their own virtual radio stations based around songs, artists, genres, and more.
Pandora is completely free to use, however ad-free streaming and on-demand music libraries can be accessed for $5 and $10 per month respectively. Pandora can be used in both a browser or app.
How much does Pandora pay per stream?
Although it is the sixth-largest music streaming platform, Pandora falls far behind other streaming services when it comes to paying artists. In 2020, musicians earn only 0.00133 per stream on Pandora. Compared to services like Spotify and Apple Music, Pandora pay less than half as much as some of its competitors.
At this rate, songs on Pandora must receive roughly 752 streams to earn one dollar on the platform. Compared to other industry leaders, this is one of the lowest royalty rates.
Next, let’s take a look at Tidal, a specialty service for high-quality rap, hip-hop, and R&B. Founded by Jay-Z and backed by many independent musicians, Tidal is one of the newest music streaming services, which is offered at a few different paid tiers.
Currently, Tidal offers a one month free trial with $10/month fees for basic service and $20/month fees for high quality streaming audio.
How much does Tidal pay per stream?
As an artist-centric streaming service, Tidal has one of the highest royalty payment rates in the music industry. Paying nearly 3 times as much as other high volume music streaming services, Tidal pays roughly 0.0125 per stream.
With this in mind, Tidal has had its fair share of controversies, so it may not be the most trustworthy platform for artists seeking streaming services pay.
Although it may be relatively unknown to many music lovers in the world, Deezer is a French streaming platform that is very popular in some circles. The company has the rights to a growing library of over 56 million songs, which is accessed by the platforms 14 million monthly users (half of which are paid subscribers).
How much do musicians earn per stream on Deezer?
On Deezer’s website, the company has stated that they “want artists to be paid fairly,” with their unique user-centric payment system. Deezer’s current model allows paid subscribers to directly support the musicians they love. If a Deezer user listens to only one artist per month, then that artist will receive all of the user’s subscription, less the fees taken from the platform.
Whereas this is a really cool model, Deezer’s average pay per stream is still only about $0.0011, which sits on the relatively low end of the streaming services pay spectrum. With the right tweaks, however, Deezer’s model has the potential to change the way streaming services pay artists.
Speaking of YouTube, the Google-owned company is now pushing for people to enjoy streaming music on the YouTube Music and YouTube Premium streaming services. YouTube Music is free to use, whereas users can upgrade to Premium to enjoy an ad-free experience.
How much does YouTube Music pay per stream?
It is a bit more difficult to calculate an average royalty payment for musicians on YouTube, because the platform also offers video and a variety of streaming possibilities. According to Google, artists make a minimum of $0.00087 per stream in Content ID instances. This includes music played on separate creator’s videos.
Beyond this, artists typically make $0.00164 on streams from their own channels and $0.008 per stream on the YouTube Music platform. With this in mind, many artists are hopeful that listeners will tune into YouTube Music, rather than finding their content in a traditional browser.
Next, SoundCloud is one of the fastest growing platforms in the music industry today. SoundCloud is designed to make it incredibly easy to upload and share music . For this reason, artists love SoundCloud for exposure and rarely count on it to earn streaming royalties.
How much do artists make per stream on SoundCloud?
SoundCloud’s payout rates are similar to those of Spotify, at roughly $0.0025 to $0.004 per stream. The exact rate is a rotating figure that is largely based on the country and continent that the user listens to the music from. On average, SoundCloud artists earn roughly $.003275 per stream.
Comparatively, however, SoundCloud leaves artists with more money in the bank as the platform gives 55% of every dollar directly to the uploader. Although this is only about 10% higher than Spotify and Apple, for every thousand streams, the dollars really do add up.
Lastly, we wanted to highlight one streaming platform that nods to the original streaming service: radio. The iHeartRadio app is free to use with an upgrade “All Access” version offered at about $10 per month.
Although iHeartRadio does not have nearly as many users as Spotify or Apple Music, the platform’s high pay rates actually often earn many musicians more compensation than the royalties paid on some of the more popular streaming services.
Do musicians earn royalties on iHeartRadio?
Yes, iHeartRadio is actually one of the highest paying music streaming services on the internet today. On average, $0.017 per stream is paid on the platform.
On top of this, iHeartRadio also shares a small percentage of ad revenue and paid subscription profit to the artists with music on the platform. With this in mind, iHeartRadio is one of the best streaming services to earn sound recording royalties.
What About Bandcamp?
Bandcamp operates under a different payment model for musicians. Their terms of service state that all music and content uploaded is considered ‘royalty-free’, and as a result, do not generate royalties for its users.
How Do Royalties Work?
Royalties are fairly simple. Although there are many types of royalties (mineral rights, television appearances, etc.), the music industry pays recording artists small amounts of money per stream for a sound recording. Streaming services pay artists based on the amount of times a sound recording is played after taking a small fee for hosting it on the platform.
In most cases, a record label or music publisher will take a fixed percentage of a musicians royalties on top of the income taken from the music streaming service.
What Constitutes A “Stream” In Music?
Streaming is one of the most popular way to listen to music today. A stream is completed when a song is played through an online platform, rather than on an individual listening device.
Streaming has grown to popularity as it does not require users to download the media they want to enjoy, which saves storage space on computers and mobile devices. Streaming is also popular in video services like YouTube and Netflix.
How Do Streaming Platforms Pay Artists?
Streaming platforms pay artists in royalties for songs that are streamed or downloaded. In most cases, the money is directly deposited into an artists bank account every month or quarter.
Although it is becoming increasingly rare, some royalties are still paid with a physical check that is mailed to artists. More often than not, low income checks from low volume streams are more of a novelty for smaller musicians rather than a serious paycheck.
How Do Streaming Services Make Money?
In most cases, streaming services make money through paid subscriptions and ad revenue. In some cases, a percentage of the ad revenue made while a musician’s work is streaming is then given to the recording artist.
How Much Does Spotify Pay Per Stream?
Like we mentioned above, Spotify pays anywhere between $0.03 and $0.04 per stream in musician royalties. This number is constantly changing and is determined by a large number of factors that are influenced both by the song and the listener.
Furthermore, smaller, indie labels usually split the net income from every penny earned per stream 50/50. For self-releasing artists, every penny earned goes right into your pocket. With that said, an association with a record label generally leads to higher exposure and better quality recordings from a professional music publisher.
What is an Album Equivalent Unit?
Before streaming services, album sales were used to measure the popularity of a musician’s work. In the 2010s, the Album Equivalent Unit was introduced to help quantify the success of a music release.
To put it simply, 1 album sale is equivalent to 10 song downloads or 1500 streams according to the Recording Industry Association of America. With this in mind, it is easier to label an artists work if they reach a “platinum” or “gold” level of equivalent albums sold.
While music listening habits have dramatically changed over the past ten years, the platforms and methods used to accommodate the internet age is an ever-changing landscape. After many illegal software programs paid nothing at all to artists, today’s top music streaming platforms are finding ways to pay artists through musical royalties.
Although a fraction of a penny may not seem like much, popular artists are still able to make passive income from music royalties while their recordings are played across many different platforms. As royalty collections are now one of the largest financial streams in the music business, artists and consumers continue to utilize and test different streaming services pay models so that everyone involved is fairly compensated.