The episode is brought to you by The Music Marketing Starter Kit. The Starter Kit is a collection of useful tools and resources helping you to market your music. The Kit shows you how to set up a fan email list and also build your own website. But, the most important thing of all. It shows you how to separate your fans from your followers.

If this is something you’re interested in, here’s the link.

Let’s get on with the episode…

So, in today’s episode, we’re going to talk about “The Apple Music Payout Increase – What It Means For Artists.”

Intro

The Wall Street Journal reported last week on an interesting development involving one of the most popular technology companies: Apple Music’s recent pledge to pay its members fair rates through various licensing agreements with labels, distributors, and publishers. 

As part of this effort, they have hired Tara Simonian — previously vice president at Pandora Media Inc., where she managed royalty negotiations spanning more than 100 countries

Apple for the first time broke down how it pays artist’s royalties depending on what region they are from and if they have a discounted or free plan. 

The average pay rate is $0.01 per stream but there was not enough information given about specific rates that vary based on geography and different types of plans offered by Apple Music.

Some of the highlights:

• Apple paid an average of $0.01 per stream for individual plans last year
• Apple Music defended itself by saying that it pays the same 52% headline rate to all labels
• Apple Music paid out royalties to more than 5 million recording artists worldwide in 2020
• Apple Music said that there has been a 120% increase in the number of artists who generated over $1 million per year since 2017.
• Apple Music said in a statement that the number of recording artists who generated over $50,000 per year has more than doubled.
• Apple Music said it would start a new, continued effort for the art community in order to provide them with updates and information.

Apple’s per-stream model is a great way to share revenue with artists, but it should be noted that the average of $0.01 does not mean an artist earns this amount every time someone clicks play on their song. In fact, Apple takes pro-rata royalties into account when dividing up its total streaming earnings and divvying them out among all performers who fall under both major US music labels and publishing companies (BMI).

Apple’s per-stream model can still work in favor for musicians if they are signed by one or more of these two groups because there will always be at least some money being paid each quarter as long as people continue listening via any platform on which songs might appear – including iTunes Radio and Beats.

As for songwriters, the Apple Music memo revealed that it pays “every publisher and licensor the same headline rate within each country,” although a specific percentage was not shared. That may be due to an ongoing legal battle amongst publishers; who have been fighting for an increased piece of the overall streaming pie for some time now.

The streaming service, who is not willing to lower royalty rates in exchange for featured songs on playlists and discovery options like Spotify did last year. 

In November they announced that the option of a new personalized Discover playlist would come with an incentive; rights-holders could take up to 80% less than their usual rate so long as they agreed to give more exposure by including some content from one or two competitors.

Some people have been questioning the pro-rata model for years. Apple acknowledged this in their memo when they said that “we’ve looked into alternative royalty models” but did not make any definite statements about them yet.”

Spotify’s main competitor, Apple Music, is trailing behind with an estimated 40 million subscribers and 200million users. This means that Spotify has a larger market share than its competitors as well as more paying members for the service. The streaming company recently launched Loud & Clear to increase transparency by showing exactly how much artists are paid from their song streams on the platform; it even goes so far as to show what percentage of revenue these songs produce in certain countries around the world.

Spotify’s average payout per stream is less than a quarter of Apple Music.

“According to figures from last year,” Spotify pays an average $0.00437 for every song streamed while “Apple music paid on average, $0.00735.” In the US it seems that one streaming service falls significantly behind the other in terms of payments which may be due to the number of subscribers and quality streams each company offers respectively – but this remains unclear without more information about either provider as well as their profit margins

What Does It Mean For Artists?

In reality, music streaming services rarely pay artists directly: Spotify and Apple pay rights-holders, usually labels and publishers. They take their cut before paying the artist for their share of revenue generated from royalties based on a percentage.

Secondly, multiple industry sources state that although the per-stream model may seem to be a clear way of measuring streaming royalty metrics, it is an outdated and even inaccurate measurement.

There are so many factors that affect streaming royalties and a single formula just can’t be used because of the differing deals with different labels. For example, some labels may have agreements in place for one service while not having any agreement for another; this would make it impossible to boil everything down to an easy number or calculation.

Branding

All in all not much has changed for the indie artist really. That’s why branding yourself and being different is still key.

Musicians can get their music heard by the world with a little preparation. If you’re an artist in need of some attention, start by getting recognized as such by people who are important to your career and have connections that will help them expose your work on different platforms. 

Artists wonder if having a brand is really that important. They might argue that at the end of the day, it’s all about their music and nothing else should matter. But this isn’t true in reality because many artists actually get away with being less talented so long as they have a strong enough brand!

You are the person behind your music. Your brand is you, which can be seen in everything that you do from recording to how you interact with people on social media and live performances. 

This means it’s important for you as a musician to have a branding strategy to include your identity as an artist, but also how you want others to see you – this will go much deeper than just what songs you play or what clothes you wear onstage.

Brands are an important part of any musician’s success. They’re what you use to identify your music and products when people encounter them in the world, which is why it’s so crucial that they be consistent with everything else about who you are as a band or solo artist.

In the music world, branding can include many different aspects: logos for all album covers/merchandise; a visual appearance on albums (including fonts), and merchandise being used consistently across platforms.

So guys that’s it.

Don’t forget to download the launch checklist and I would also like to remind you that the Music Marketing Starter Kit is now live. I’ll leave the links in the show notes or on the website if you’re interested?

Intro Music by Tonez&Re-C

Outro Music by Brian Tyrie – Owner and Founder of TalentWav.com

The episode is sponsored by – Musicmarketingstarterkit.com

Photo by Leo Wieling on Unsplash