Streaming Services' Royalties Calculator
Music streaming services, such as Spotify, Apple Music or TIDAL, have been growing rapidly in the recent months and years and it's hardly surprising. At the price of $5-10 per month (depending on your country and type of service) you have access to a virtually unlimited source of legal music on basically any device. They also pay the artists per listen they get. But this begs the question, can they make a living from these seemingly tiny royalties?
Information about the actual size of the royalties received has been hidden behind complex equations, which often also involves company revenue, making it impossible to get precise figures. Some companies, such as TIDAL, have been bragging about paying multiple times more than services, such as Spotify or Apple Music, attracting plenty of artists for exclusive deals. Numbers such as $0.0011 or $ 0.0073 per song played still seem quite vague for many so we built this tool to help you estimate how much artists could be grossing thanks to you.
We based the royalty fee numbers on the following chart from informationisbeautiful.net. Please note that those are only approximate fees and they might change on a frequent basis. If you have some more up-to-date data - please let us know. We assumed the average duration of a song is 226.93 seconds (3 minutes and nearly 47 seconds), based on the research by StatCrunch. The weekday/weekend separation is there because you might have a completely different "listening schedule" depending on whether you are at school or work.
Is it really linear?
You may be wondering - if I listen to music 24 hrs per day, does my favorite band receive 24 times more money than if I was doing it just for an hour per day? The answer isn't either yes or no. It's rather it could be, but as it's on such a small scale, it doesn't really matter.
What makes sense and what's been communicated by the companies is that they share a certain percentage of their revenue with artists. This is a bulk part of their gross margin. With the kind of numbers that they get, it doesn't really matter if John listens for 4 hours, Jane for 2 or if they both listen for 3 hours. Ideally, the artists cut of my ten bucks should be distributed among them proportionally, depending on how much I've listened to their songs, but simplifying it in this way is a reasonable approach.
There are a few interesting potential problems, though. For example, my gut says that people who enjoy niche music spend more time listening to music than those who listen to mainstream genres. And then those niche artists would be overcompensated at the expense of pop ones. I guess this hypothesis could be verified by data-mining last.fm... anyone? :-)