In a letter sent out to artists last week, Apple disclosed that it actually pays out a penny per stream, and while that may not sound like much on the surface, it’s about double what Spotify pays out.
According to The Wall Street Journal, the letter was posted to the service’s artist dashboard and sent directly to labels and publishers, following a similar move by Spotify last month.
Of course, this is one area in which Apple doesn’t have to worry about losing ground to its chief streaming rival. While Spotify may have twice as many subscribers as Apple Music, it’s made a few big missteps in recent years when it comes to fairly compensating artists — moves that have made Apple look better simply by contrast.
Chief among these was an unprecedented challenge that Spotify and other major music streaming services like Google and Amazon made to a decision by the U.S. Copyright Board to increase the rate of royalties. While they filed an appeal opposing the increase, Apple simply refused to get involved, accepting the ruling without comment.
While the situation was arguably somewhat more complicated than just the increased royalties, the bottom line is that Spotify et al came across as greedy big tech companies who wanted to take money out of the mouths of artists. Music industry executives called the move akin to “bullying” and “declaring war” on the songwriting community.
Meanwhile, those same executives lauded Apple as a “friend to songwriters.” National Music Publishers’ Association CEO David Israelite added that “every songwriter and every fan of music should stand up and take notice” of the quiet courtroom appeals that Spotify and Amazon have been engaging in to deny songwriters and musicians their due.
Then, in the middle of what was already certainly bad PR for the streaming service, Spotify used the very regulations that it was opposing to demand money back from artists as a result of alleged overpayments. It was a move that the music publishing industry called blatantly hypocritical, particularly since if Spotify won its appeal it would end up having to give that same money right back to the artists.
So, it’s probably not a big surprise that Spotify is trying to spin its opaque variable lower royalty payouts to artists as actually better than Apple’s. In fact, Spotify launched a dedicated site last month in which it tries to make sense of the 800 different payout rates that it uses, based on subscribers on different plans and in different countries.
To be fair, Spotify does pay a larger amount of money to the music industry overall, but that’s simply because it has a far larger number of users — 345 million in total, with 155 million as paying Spotify Premium customers. While Apple hasn’t revealed any subscribers numbers since it crossed 60 million two years ago, most analysts peg that number somewhere around 72 million.
While Apple insists on an easy-to-understand “per stream” rate, Spotify simply says it doesn’t believe that’s “a meaningful number to analyze,” despite the fact that this is how artists prefer to calculate their earnings from streaming services. In fact, Spotify spends so much time trying to explain why per-stream rates are the wrong metric to use that it quickly starts to sound like they’re protesting a bit too much.