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Apple Music Says Per-Stream Royalty Rate Is Double What Spotify Pays

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Apple Music pays music rights-holders a penny per stream on average, the streaming service revealed in a letter to artists, labels and publishers today (April 16), as first reported by The Wall Street Journal.

The streaming service's payouts come out of monthly subscription revenue from users. While the exact payout varies by subscription plan and country, the company said in the letter, which was reviewed by Billboard, that it averaged a penny per stream for individual paid plans in 2020. The figure does not take family plans into account.

A penny per stream is roughly double Spotify's average rate of around one-third to one-half of a penny per stream. Both services pay rights-holders -- like record labels and publishers -- based on the share of total streams that their artists bring in, after which those rights-holders pay artists based on their agreements.

Apple Music's letter comes amid growing criticism of streaming service payment models, which became louder as the music industry grappled with the loss of touring amid the pandemic. The Union of Musicians and Allied Workers (UMAW) launched a "Justice at Spotify" campaign last fall to raise the service’s per-stream rate to a penny, and days after an international UMAW protest at Spotify offices on March 18, the company launched a "Loud & Clear" website breaking down its payment process.

"As the discussion about streaming royalties continues, we believe it is important to share our values," Apple said in the letter. "We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for featuring" music prominently on its service.

Spotify's average per-stream payout rate is lower than Apple Music's because it has more users who listen to more music per month than listeners on other services do, and because it has a free, ad-supported tier -- unlike Apple Music, which is available only through a paid subscription.

As the world's largest streaming service, Spotify has 155 million paying subscribers out of 345 million total active users. Meanwhile, Apple last reported more than 60 million Apple Music subscribers in June 2019.