Why the opposition between Apple Music and Spotify over payments for streams does not affect anything

Apple can be confident that it pays twice as much for streams compared to the industry leader – Spotify. However, in reality the situation is more complicated and still not in favor of the musicians.

Photo: Kuba Bożanowski.  Source: Wikimedia.
Photo: Kuba Bożanowski. Source: Wikimedia.

What happened

By data The Wall Street Journal, Apple Music representatives sent an information letter to musicians and label managers who cooperate with the site, where they explained exactly how things are with payments for listening to tracks. Journalists of the publication studied the document and immediately concluded that Apple’s royalty twice as high… Moreover, they cited statistics of the sites themselves for the past year and noted that Spotify transferred an average of $ 0.00437, and Apple Music – $ 0.00735 per stream.

Together with this on the network started discussion of unconfirmed statements like that Apple is allegedly convinced that absolutely all streaming platforms should exclude commissions for promoting tracks by the site. Plus – to pay at least a center per stream, which Apple supposedly does for some segments of authors and performers.

Difficult to compare

Wall Street Journal publication criticized fellow journalists from Varaeti. They managed to get a similar letter from Apple Music from three independent sources, but they could not find direct statements about a two-fold excess of payments in comparison with Spotify, as well as any mentions of this streaming platform.

Photo: Toa Heftiba.  Source: Unsplash.com
Photo: Toa Heftiba. Source: Unsplash.com

In fact, royalties were mentioned only in one of the fragments of the document, where Apple Music noted that they had already brought the payment bar for playing a track to one cent. At the same time, representatives of the site emphasized that the amount of remuneration varies depending on the type of subscription of listeners, and most importantly, they gave a disclaimer that this amount includes deductions to publishers and other rightholders. It is fair in Varaeti stated lack of any data on how Apple got its calculations.

At the same time, platforms do not conduct direct transactions, but only send about 52% [Эппл мьюзик] and 75-80% [Спотифай] labels and distributors, who withhold their commission and only then distribute the remainder between the authors. Therefore, it is simply incorrect to compare the amounts that are actually received last. Both the internal business processes of the sites and their agreements with distributors differ, plus there are other factors. So, Apple music also determines the belonging of listeners to a particular country, and it cannot be ruled out that this moment affects the payments to musicians.

Moreover, Spotify’s audience is about twice the number of Apple Music users. And she does not have any additional sources of income – like Apple’s.

No “transparency”

Criticism from musicians does not subside… As you can see, competitors of one or the other streaming platform also indirectly connect to it. Therefore, Spotify decided to be proactive and about a month ago launched a website with detailed explanations about how the streaming platform makes payments musicians.

However, the bet on openness, the effort and money invested in content and its promotion in the media did not work. Interestingly, for some representatives of the music industry, this project became additional irritant. They again complained about the site’s reluctance to move towards “cent per stream” and accused it of trying to get rid of the site.

Photo: Amirr Zolfaqari.  Source: Unsplash.com
Photo: Amirr Zolfaqari. Source: Unsplash.com

One way or another, loud statements thrown into the media and similar “transparencies” initiatives do not change anything. The financial model used by streaming sites and their approach to calculating the size of payments remains the same. So far, not so many novice authors and performers know about him. And the platforms themselves are too busy with the “PR war” and the promotion of indicators in the media that have nothing to do with real payments. Therefore, significant changes on the side of the industry monopolies should not be expected, as well as a sharp increase in income for small groups, indie authors and even professional musicians.

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