If your music is already on internet radio services like Pandora and iHeartRadio, you’re probably aware of what the payout rates look like. If you don’t know, let’s just say that they aren’t the kind of royalties that you can retire on, unless you’re planning on having your songs streamed several billion times (you wish). Thankfully, the amount that you’ll be paid per stream is going up. Not a whole lot, but when it comes to streaming (and making a living from the music industry), every little bit counts, right?
Many musicians may not realize that, unlike on-demand services (ones where you can choose a specific song or album to listen to), internet radio companies don’t set the rates that they pay per stream to artists. That figure is set by the Copyright Royalty Board, which is a three-person panel of judges. That trio of people meets every five years to look at the state of the industry and the economy, and come up with a new figure.
Recently, the board met yet again to update the rates that will last for another five years, and it was a contentious legal battle. As with any court-mandated entanglement, the outcome is a bit complicated, but here’s the gist.
Free streams – those being listened to by people who don’t pay for an account, which is typically supported by the occasional advertisement – have gone up slightly. Services used to pay $0.0014 per stream, and that figure has grown to $0.0017. Doesn’t sound like a lot, but when accumulated, that is several hundred million dollars extra that companies like Pandora will be paying per year. Those streams that come from customers that do pay for an account (so as to avoid advertisements) have gone the other direction, dropping from $0.025 to $0.022. Again, it’s just fractions of a cent, but those all add up.
During the deliberations, the interested parties were allowed to submit a rate and make their case for why that should become “law.” There were two sides this time around: SoundExchange, a nonprofit organization that collects royalties from internet radio services and distributes them appropriately, and platforms like Pandora. Now, it shouldn’t come as a shock that those having to pay out royalties wanted to see the rates go down, while those collecting them for artists had the exact opposite in mind.
Going into the discussions, Pandora asked the judges to set free stream royalties at $0.0011 per play, while iHeartRadio went even lower, requesting that number descend to a measly $0.0005 per play. On the other side of things, SoundExchange reached for $0.0025 per free play, but that was a bit high. So, while the new, just-announced rates may sound pretty low to any musician out there, keep in mind that if the online radio services had gotten their way, rates would have been much, much lower.
So, if we’re talking about fractions of a cent, why does it matter? First of all, you should always know what you’re being paid for your work. It doesn’t matter if it seems like pennies or if you’re not sure how it all works – this is your money, and you shouldn’t be casual about it. Second, these numbers might not make much of a difference to you when you think about streams individually, but we all know how popular streaming is becoming. In the first half of 2015, there were over one trillion streams between several of the most popular platforms, and that number is expanding rapidly. People will likely be listening to your music more and more. So, those tiny bits of dollars? Well, there will be a lot more of them in the future.
Since the aforementioned rates are going to be around for the next half-decade, it’s a good idea for you to know what they are. Will they go up or down the next time the Board meets? Nobody knows, and to be quite honest, the streaming world will likely be very different by then anyway.
here is the link http://blog.sonicbids.com/internet-radio-pandora-iheart-radio-pay-more
HERE WHAT ARTIST MAKE FROM OTHER STREAMING SITES
In 2010, data journalist and information designer David McCandless published an infographic on his Information is Beautiful website showing how much musicians earned online from sales and streams of their music.
It caused quite a stir within the music industry, which even then was debating what the emergence of streaming services like Spotify would mean for artists. In 2015, that debate is still going on, and it’s even more heated.
Now McCandless has created a new version of the infographic, updated for 2015.
As before, it digs in to stats from various digital music companies, from the likes of Bandcamp, iTunes and Amazon that sell music, to streaming services: Spotify, Deezer, Apple’s Beats Music, Rhapsody, YouTube and Tidal.
Besides calculations for how much an artist can expect to earn from a single sale or stream, the infographic shows how many of those sales or streams they’d need to earn the US monthly minimum wage of $1,260.
Some important caveats: these numbers apply to performing musicians, but they do not include publishing royalties for the songwriting. Plus, the most important factor in how much an artist signed to a label earns is the terms of their contract: some have good, fair deals. Others… less so.
Averaging that out is also the reason why the figures here may not match those announced by the streaming services.
For example, Spotify says that its average payout for a stream to labels and publishers is between $0.006 and $0.0084 but Information Is Beautiful suggests that the average payment to an artist from the label portion of that is $0.001128 – this being what a signed artist receives after the label’s share.
Finally, the per-play figures for streaming service can be misleading, as they depend on how many (or few) users the service has. Beats may pay more per-stream than Spotify, but that’s because it has relatively few users.
Artists will be making a lot more money in aggregate from Spotify, and if Beats’ user numbers grow, its per-stream payouts will come down. So this graphic isn’t proof that one service is better for artists than another, in that sense.
Information is Beautiful has included a metric of “users per play needed” – the little dots at the bottom right of each circle – to reflect this.