In a move to provide transparency to the music industry, Billboard has launched a royalty calculator for Spotify and Apple Music users. This creation is the result of collaboration with music industry law firm Manatt, Phelps & Phillips, utilizing the firm’s in-depth analysis of US data obtained from direct source payors.
By entering the number of streams for a song or album, the calculator instantly displays the complete payout based on the inputted stream numbers, the payout for the sound recording directed to the copyright proprietor, mechanical royalties destined for the music publisher, who in turn compensates the songwriter, and performance royalties directed to performance rights organizations such as ASCAP, BMI, GMR, and SESAC.
An overview of streaming data reveals Apple can boast higher rates per play in comparison to Spotify. Nevertheless, during the first half of 2023, Spotify’s payouts to labels and publishers exceeded those of Apple Music – $1.84 billion as opposed to Apple’s $1.68 billion. This discrepancy is ascribed to Spotify’s expansive subscriber base. Specifically, the play rate offered by Spotify is lower since its combined tiers witnessed over double the plays when juxtaposed with Apple’s total streams for the same duration.
All the given figures represent a combined rate of all available service tiers. For instance, Spotify’s displayed rate is an amalgamation of its paid tier, ad-supported tier, and other categories. These payout amounts are derived from the monthly subscriber fees that both Spotify and Apple amass and the subsequent number of plays.
Given the fluctuating nature of these numbers, Billboard will refresh the calculator monthly, typically after a three-month interval. This lag is attributed to the time taken for service data to be available. The present rates reflect data from June.
Manatt’s Jordan Bromley commented, “Gone are the days where artists cannot fathom the value of a stream. Knowledge is power, data is paramount, and simple answers and insights are now available for all. This offering is just one of many coming to help every creator and rights holder understand the true value of what they own.”
