The Math On Music Streaming

By Alan Cross

Before we get into some stats on how much the various streaming services pay out for the play of a song, let’s remember that you cannot compare these payments to that of a sale of a song.

A stream is one listen by one person. A sale involved unlimited listens in perpetuity by whoever buys the song. No wonder the payouts are different. (I break things down even further here.)

That being said, streaming payouts are very low. And remember that these rates are what’s demanded from the streaming companies by record labels and rights holders.

Now that’s out of the way, let’s go to the Trichordist, David Lowery’s blog about the concerns of the working musician. Every year, he issues his streaming price bible, a look at what each of the services pays out. I quote:

“This data set is isolated to the calendar year 2018 and represents a mid-sized indie label with an approximately 250+ album catalogue now generating almost 1B streams annually. 2018 is the year we saw streaming truly mature as the dominant source of recorded music revenues.

In parsing the data provided, we find that digital revenues are 86% of all recorded music revenues globally (RIAA Reports Digital Revenues as 90% of Total). Streaming is 80% (or more) of Digital Music Revenues. Downloads are about 20% of digital music revenues for the year; however, if we isolate Q4, it would appear download revenues could be less than 15% of digital revenues. The transition from downloads to streaming is well beyond the tipping point, and we wonder how long the major services (Apple, Amazon, Google) will continue to support the format.” -- Continue reading here.

-- Excerpted from Alan Cross's newsletter, A Journal of Musical Things