In the streaming era, fans do not pay per song, and no major streaming service pays per stream, so we don’t believe that a “per-stream rate” is a meaningful number to analyze. All streaming services pay essentially the same way: Around two-thirds of music revenue is paid back to rights holders based on their streamshare.
So, if every service pays out the same way, why is the average payout per stream different for each service?
The calculation is simple: Total payouts ÷ total streams = the “per-stream rate.”
So if users of a service don’t stream very much, the “per-stream rate” is higher. But the problem is that streaming more means people like the product and will continue to pay for music (and drive streams and money to a wider array of artists). If you stream very little, you are less likely to continue being a Premium subscriber, which means less money for artists.
Spotify offers the most engaging service where users stream more each month. That’s why Spotify has been able to grow its subscriber base and have the highest total payouts by far: $10B+ in 2024, up 10x from a decade ago. Everyone in the industry should want more streams per user as opposed to less.
Building a service that inspires listeners to stream lots and lots of music each month decreases the effective “per-stream rate” on Spotify but increases total payouts. We believe artists care more about a larger paycheck than a higher “per-stream rate.”