Apple Music Royalties Framework 2023

March 12, 2024

One of the key things when it comes to making music for money is understanding how much each streaming platform pays. That payment is called a royalty or royalties. Royalties are paid to producers, record labels, songwriters, recording artists, rights holders and publishers.

Royalties can also be broken down into a range of categories because there are also different copyrights.

Composition is the rights that are based on melodies, harmonies, and lyrics. These rights belong to the publisher and the songwriter(s).

Master is the rights that are the record label, recording studio, and recording artist, and are based on the distribution and the reproduction.

Each of the different rights and where they originated from (country) will yield different royalty payment amounts.

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What are the different types of royalties in the music industry?

There are several types of music royalty, and it is important to know which one applies to you and how it impacts how much you will get paid.

The Master Recording Royalties are paid to the record label, producers, and recording artists when the track is physically purchased, streamed, or downloaded.

The Neighboring Rights Royalties come from the music being played on the radio, on TV (shows and music channels), in public spaces, in a business, and in the cinema.

There are also Digital Performance Royalties, Mechanical Royalties, Public Performance Royalties, and Synchronization Royalties.

Since the music industry has been changing, moving away from tapes and CDs and deep into streaming, streaming has become one of the highest sources of revenue for musicians (next to merch and live performances for bigger artists).

With Apple Music being one of the biggest music streaming platforms, along with Deezer, Spotify, and Amazon Music it begs the question - how much is Apple Music playing in royalties?

What are the types of streaming royalty in Apple Music?

Like many other music streaming platforms, there are a lot of variables when it comes to how much you’ll get paid if you’re an artist on Apple Music. But here is what Apple Music has said:

52% Headline Rate

Apple Music states that it supports all music the same way, so a flat rate of 52% is applied to all. The biggest record labels in the world receive the same as independent artists. To quote Apple Music - ‘sign with a label or stay independent,’ they’ll pay the same headline rate.

Average Per Play

While many streaming services have wildly varying pay-per-play, Apple Music has a solid $0.01 per play. That is not to say that there is no variation, though; what it means is that in 2020, their average pay-per-play was $0.01, and that is still maintained. Included in that are both publisher and label royalties. They note that there is some variation based on region, country, and subscription plan.

Compositions

Apple Music has taken into consideration the songwriters, so all licensors and publishers will also get the same headline rate within each region or country.

They added that they use an optimized system (which they invested millions in) to make sure that they pay songwriters as quickly as possible.

What counts as a stream for Apple Music?

Like many of us, you might skip a track after a few seconds, or you might play a song on repeat - and an important question is - do both of these receive the same payment? Are they both counted as a stream?

The short answer is no. The longer answer is that Apple Music counts anything over 30 seconds as a stream or a play. Further to that, it counts whether it is on Apple Music radio or in your own playlist.

The theory behind why it is 30 seconds, is that was the standard length of a track preview, and previews were free.

How does Apple Music judge the performance of a song?

It is important to understand the performance metrics that Apple Music uses when talking about royalties and payments because they will ultimately impact the popularity and overall payments.

Here are the metrics that Apple Music judges on?

  • How many times an album or a song has been purchased?
  • Does Shazam recognize the track?
  • How many times has the music video been viewed?
  • Has the song been added to the Apple Music editorial playlists? (see note)?
  • The milestones like Top Plays.
  • The number of average daily listeners.

Note: It is important to know that Apple Music explicitly stated that when a song gets added to the editorial playlists, there is no penalty for accepting it as a featured song. So when a tastemaker selects your song, you will be paid the same.

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What was in the leaked Apple Music email about royalties?

Digital Music News obtained an official Apple Music email showing they are changing things in their royalties payments, which is not too dissimilar from new Deezer Artist Royalty plans.

Deezer is currently implementing what they call a fairer payment system for artists - some of which are based on the content and quality of the music.

The Apple Music email says that they will change how royalties are calculated - specifically for artists investing money into producing Spatial Audio tracks. Plays/streams of Spatial Audio will offer a higher royalty payment.

This would mean that the artists, labels, and other rights holders would be compensated better for more investment in their own work. Spatial Audio was introduced to Apple Music in 2021 so that in itself isn’t new - but the increased payments are new.

It helps that Apple have software - Logic Pro - that artists can use to create the Spatial Audio, so the investment works in multiple ways for Apple, and then artists.

Apple Music and Deezer aren’t alone when it comes to changing payment to match the tech used by listeners, by artists and their labels. Both Spotify and Amazon Music have Spatial Audio and lossless listening options for which users pay a premium - but are yet to announce changes to how they pay their artists.

How much does Apple Music pay artists per stream in 2023?

Keeping in mind that the monthly income on Apple Music will fluctuate, what can artists expect to be paid (roughly)?

Apple Music states that they have an average payout of $0.01 per stream, so if you manage to get ten thousand streams, you could make $100.

If you’re wondering how that stacks up against how much Amazon Music or TIDAL pay in royalties, here is a handy Spotify Royalties Calculator (the calculator features all the big streaming platforms).

How does Apple Music pay artists?

To get paid royalties from Apple Music, you’ll need to meet certain criteria.

  • You’ll need to provide all of your tax and banking information
  • Pay attention to the Apple Music payout threshold
  • Your cumulative amount owed should not exceed the minimum payout amount

There is the minimum payment threshold, but if your country or territory is not listed in the link above, then a standard of $40 USD is applied.

Apple Music makes payments within 30 days of the end of their fiscal month, and it is important to note that the date that you see on the Payments and Financial Reports is not the date you will receive the money; instead, it is the date that the money left Apple’s bank account.

How are Apple Music payments made?

Electronic Funds or Wire Transfer - all payments are made via EFT using a low-value Automated Clearing House when possible. Apple Music only accepts one bank account per financial report and, where practical, makes a single payment to that account only.

A couple of important points:

  • Apple’s bank can consolidate the different payments so you may receive a single payment for all earnings.
  • You might have to pay fees and charges, depending on your own bank, and that will make the payment appear lower.
  • And for some good news, when a currency conversion happens, you might get a more favorable rate ‘due to Apple’s volume.’
  • Royalties earned outside of Europe will not require a hardcopy invoice sent to Apple. However, royalties earned inside of Europe will require a hardcopy invoice sent

You can access all of the information for each payment in your Payments and Financial Reports.

In the end, Apple Music pays some of the highest royalties to artists, following Napster and TIDAL, both known for their generous royalty payments.

Is it time to switch music streaming platform?

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