How Much Streaming Services Pay Artists in 2024

Discover which streaming service pays musicians the most. See the payout rates of all major music streaming platforms like Spotify and Apple Music.

How Much Streaming Services Pay Artists in 2024

Every musician has two key goals โ€” to get their music in front of the largest possible audience and to earn a decent income for their work. Music streaming platforms have certainly helped artists achieve the first objective, providing access to massive listener bases.

However, the second goal โ€” earning a sustainable income from streaming โ€” remains a significant challenge, particularly for smaller and independent musicians. Despite the massive listenership, the royalty payouts from these platforms are vague and notoriously low, often amounting to just fractions of a penny per stream.

As a musician, you may wonder: Has the situation improved in 2024? How much exactly do the music platforms pay per stream? What's the highest-paying music streaming platform? Read on to find out.

How Streaming Platforms Distribute Royalties

Royalty Distribution Models

There are two ways music streaming services may distribute royalties. The first is the pro-data system, which calculates royalties based on the total number of streams a service has amassed. Streaming platforms like Spotify utilize this method, distributing revenues based on the percentage of total streams each artist receives.

The second is the user-centric system. In contrast to the pro-rata model, the user-centric one allocates royalties based on each userโ€™s subscription fee and the specific artists they listen to. Some consider this method a fairer distribution of streaming revenues. However, the adoption of this model remains limited. SoundCloud and Deezer are the only examples of music platforms actively considering or experimenting with user-centric royalty distribution.

Key Factors Influencing Royalty Rates

๐Ÿ”น Type of rights held. The type and scope of rights held by the artist or rights holder are crucial factors in determining the applicable royalty rates. Artists must own the copyright and publishing rights to their music in order to monetize it effectively. Exclusive rights, such as master recording rights and performance rights, allow artists to earn higher royalty rates compared to non-exclusive or partial rights.

๐Ÿ”น Revenue sharing. The revenue-sharing split between the platform and rights holders is a key determinant of royalty rates earned by rights holders and artists. Streaming platforms typically distribute a substantial portion of their revenue to rights holders, often around 70% or more.

๐Ÿ”นStreaming thresholds. Many streaming platforms have minimum stream thresholds that must be met before royalties are paid out. The thresholds ensure a baseline level of engagement and popularity before triggering royalty payments. For instance, Spotify may require a track to achieve at least 1000 streams within a 12-month period before generating royalties for the rights holder.

Country-Specific Streaming Rates

In addition to the above factors, streaming services adjust their payout rates based on the geographic location of the listeners. For instance, YouTube has different payout rates depending on where the content is streamed. Similarly, Spotify's streaming rates are influenced not only by the listeners' country of origin but also by the type of account plan they possess and the specifics of the distribution agreement in place.

Apple Music also adapts its payout rates according to local market conditions, which means that artists may experience varying earnings for streams in different countries. The complexity of royalty rates extends further as they are influenced by factors such as geographic regions, the type of subscription plan, the total volume of streams, and contractual agreements with record labels.

The Impact of Subscription Tiers on Artist Earnings

Subscription tiers significantly influence the earnings artists receive from streaming platforms. Different subscription models, such as ad-supported, trial, student, family plan, and premium tiers, offer varying payout rates to artists.

For instance, Spotify, which dominates the market by contributing 60% of total income, has announced a price hike for its premium subscription in the United States and other markets. This adjustment is intended to enhance the user experience by including additional features like audiobooks, podcasts, and ad-free music listening. However, this change could also lead to a reduced royalty rate for U.S. songwriters and publishers. It's set to take effect with the upcoming subscription price increase and is not retroactive.

How Much Music Platforms Pay Artists Per Stream in 2024

The following figures are averages and the actual payout rates may differ due to the factors we described earlier. The music streaming platforms that pay the highest per-stream royalties in 2024, from highest to lowest, are:

๐Ÿ”นQobuz: $0.022 per stream

๐Ÿ”นNapster: $0.019 - $0.021 per stream

๐Ÿ”นTidal: $0.013 per stream

๐Ÿ”นDeezer: $0.0064 per stream

๐Ÿ”นApple Music: $0.0056 - $0.0078 per stream

๐Ÿ”นSpotify: $0.00437 per stream

๐Ÿ”นAmazon Music: $0.00402 per stream

๐Ÿ”นSoundCloud: $0.0025 - $0.004 per stream

๐Ÿ”นYouTube Music: $0.0007 - $0.0012 per stream

๐Ÿ”นPandora: $0.00069 per stream

The Main Takeaways

Interestingly, the music streaming platforms that offer lossless audio (Qobuz, Napster, Tidal, and Deezer) pay artists more than others. Despite its lower market share, Qobuz is the leader of the listโ€”it's the highest-paying music streaming service in 2024. Sadly, streaming giants like Spotify, Apple Music, and YouTube offer significantly lower payout rates while having the largest listener bases.

It doesn't mean that you need to go exclusively with Qobuz, don't put all your eggs in one basket. It's smart to make your music available on multiple platforms, even on Spotify, since it's the most popular service. The final decision is entirely up to you.

If you're a listener reading this article to find out how well your favorite musicians are compensated... Well, unless your faves are major artists like Taylor Swift or Drake, they are more likely than not paid literal pennies that cannot support the livelihood of creators. Consider supporting artists directly through platforms like Bandcamp, buying merch, and attending live shows โ€“ all of these make more impact than only streaming their music, especially for lesser-known and independent artists. ย 

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