Major music labels are making millions per day from streaming services like Apple Music and Spotify. The artists? Not so much.
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Streaming services are now paying out big money to the music industry’s gatekeepers.
According to a by industry news outlet Music Business Worldwide, the three major music labels made $6.93 billion combined from streaming in 2018. The publication poured through recent investor filings from Universal Music Group’s parent company Vivendi, Sony, and Warner and found that the companies are totaling $19 million in daily streaming revenue.
Broken down even further, the trio of labels generate nearly $800,000 per hour just from music streaming services.
As Rolling Stone , when looking at the combined revenue for the three labels across all formats and commercial endeavors — $13.14 billion — streaming revenue accounts for more than half of that. That’s more than a 10 percent jump when compared to how much streaming revenue accounted for in 2017.
Universal (UMG) saw its streaming revenue jump the most with an increase of $864 million a year, or $2.4 million a day, when compared to the year prior. UMG’s 2018 streaming revenue is almost double what it made in 2016. The labels most popular artists include Drake, Lady Gaga, Ariana Grande, Post Malone, and The Beatles.
However, this newfound music-streaming wealth is not being shared fairly among artists.
Streaming giants like Spotify and Apple Music notoriously only a fraction of a penny per play. Music labels take as much as 80 percent of those earnings as part of . Bigger stars who negotiate a more favorable royalty split still usually share around 50 percent of music revenue.
Music legends and pop superstars have even complained of how little they make from music streaming.
David Crosby notably about streaming services’ low pay on Twitter last year. The founding member of the Byrds and Crosby, Stills & Nash pointed out that some major record labels received ownership shares in services like Spotify in return for the low per stream pay, effectively locking artists out of the upside of such deals.
Taylor Swift went so far as removing all of her music from streaming services in protest of the small percentage of earnings artists’ receive. She only after platforms such as Apple Music made concessions like agreeing to pay artists for plays during free trial periods. She also forced UMG to its $1 billion stake in Spotify with artists when the label sells when the label re-signed her.
Many streaming companies have recently raised their payouts as the services become more popular, or in some cases, because they were . Still, pay for the artists remain low making things especially difficult for unsigned, independent artists.
In December of last year, popular cellist and composer Zoe Keating that more than 2.25 million streaming plays of her music on Spotify netted only around $12,200. That’s even after a raise from Spotify as Keating’s 2018 payout per play was greater than it was in previous years.
Clearly, the major labels and tech companies are now prospering in this new music streaming space. It’s time artists receive their fair share.
Mashable has reached out to Apple and Spotify for comment, and we’ll update this story as soon as we hear back.