Every Download Costs Apple Music About One Cent

A letter viewed by the Wall Street Journal (WSJ) from Apple Music that was sent to creators, publishers and labels said that the tech giant has a penny-per-stream payment structure.

The disclosure was sent to artists on Friday (April 16) via Apple Music’s artist dashboard. The central point was to cement Apple Music’s position as a platform that is artist friendly as it strives to better compete with Spotify and other streaming services.

Experts in the music industry think the price could go below a penny per stream since Apple Music’s biggest competitor Spotify — the world’s leading music-streaming site — pays about one-third of what the iPhone maker pays for each stream.

Apple said in June 2019 that it had over 60 million subscribers to its music platform, but Spotify has 155 million paid subscribers among its 345 million total active users, some of whom are on the free tier. Another music competitor, Amazon, said last year that it had 55 million music subscribers.

“As the discussion about streaming royalties continues, we believe it is important to share our values,” Apple said in its letter. “We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay for featuring” music in prime display space on its service.

Overall, Spotify’s base of creators generates more downloads and earns more in comparison to Apple’s payments to artists, which come from users’ monthly subscription revenue, per the release.

The streaming music wars have ended up in the crosshairs of the European Union, with a lawsuit stemming from Spotify accusing Apple of antitrust practices by promoting its own music streaming services over rivals.

In order to better compete against streaming rivals, Apple explored a premium subscription podcast tier in January. At the same time, Spotify ramped up its investment in podcasts and threw money at new programming and technology.