Some thoughts on the latest news around streaming payout rates:
The well known resource for music industry article Hypebot just published a new article discussing the latest insights about streaming payout rates and market shares, highlighting the big players Spotify, YouTube, Apple and Pandora:
Many people in the business are annoyed about the decreasing payout rates of Spotify, for good reason. Spotify had a average amount of 0,00521 $ per stream in 2014, which is currently set at 0,00437 $ according to an analysis of The Trichordist. However, it is hard to get angry and react with a take down of your own label or artist catalogue from Spotify, when you realise that Spotify has a market share of 70 % within the streaming royalties displayed above. Therefore, there aren’t many alternatives to Spotify.
Another service to highlight in this article is YouTube. It is widely known that the majority of record labels put much effort in their YouTube channel, promoting videos and previews at YouTube in other social media channels. In terms of the payout rates, this focus on YouTube feels a bit like casting pearls before swine, as you have such a low payout rate. Spotify pays over 6 times more than YouTube for each stream, and we are already annoyed by Spotify’s rates.
Obviously, YouTube offers an essential advantage of playing the full video without any registration. Previewing a Spotify tune without account is only possible for 30 seconds. Nevertheless, comparing these two services, it is obvious that artists and labels should focus on directing their fan bases to Spotify, due to the higher payout rates.
Another argument for Spotify is the growing relevance of the artist in the Spotify algorithms, when it comes to curated playlists, verifying the artist account, developing a community on Spotify and set sails for the streaming-dominated future in the music industries.
A player to watch will be Apple iTunes (once more). The payout rates of Apple iTunes are nearly two time high in comparison to Spotify. If the market share of Apple iTunes grows in 2017, it will be a relevant player in the world of music streaming for the music industries. And probably, it will grow significantly.