Business

How Much Artists Can Make From Music Streaming Applications

How Much Artists Can Make From Music Streaming Applications
Music streaming easily contributes the biggest chunk of revenue to the music industry, even in India, where user penetration is at a lowly 6.6% [Source: Statista]. Revenue from music streaming services is expected to grow at close to 4%, year-on-year. The recent coming together of Jio Music and Saavn only corroborate the fact that music streaming is where the money lies. Given that businesses are bullish on the potential of streaming services, and since India is rapidly improving in terms of internet speeds, it is safe to assume that the streaming business model is here to stay. However, while streaming apps might help independent artists get discovered, making a living through these services as an independent artist seems to be really, really difficult, at least for now.

150 Streams on Apple Music Will Fetch You a Plate of Roadside Momos

I reached out to two independent electronic music artists in Delhi. One of them has even received support from the likes of Martin Garrix and and has clocked more than a million plays on Spotify. Names of the both the artists are being kept confidential upon request. However, for the purposes of this article, I will name them artist A and artist B. According to A, he gets approximately $0.005 per stream from Apple Music, 30% of which goes to his distributor. Thus, he pockets $0.0035 per stream from Apple Music. Similarly, Artist B gets $0.0024 per stream after deducting the distributor's cut. To make things simpler, let's take the average of the two numbers, which comes out to be roughly $0.0030 per stream. Converting that to INR (dollar value taken as Rs 63 for ease of calculation), it comes down to 18.9 paise. Thus, if you are an artist, 5 streams on Apple Music will fetch you a rupee, and likewise, you need 150 streams to buy a plate of roadside momos.

Saavn's Numbers are Worse

Artist A did not have his music up on Saavn. In fact, when I was going through Saavn's music collection to identify artists I could contact, I could hardly find any independent artists or artists that weren't related in some way to Bollywood, on the platform. Artist B, however, does have his music up on Saavn. According to his calculations, he gets $0.0004 per stream from Indian streaming giant. Converted to INR, that comes down to a meagre 2.5 paise. In other words, if you have your music up on only Saavn, you will need 40 streams for a rupee and 1200 streams for a plate of roadside momos.

90,000 Streams for Minimum Wage

If the Government of India's plan goes through, minimum wage in the country could be set at Rs 9,000 per month. For ease of calculation, I am going to average the approximated payouts from Apple Music and Saavn, which equals 10.5 paise per stream ([19 paise + 2.5 paise]/2). According to this calculation, an artist will need, approximately, 90,000 streams every month, just to make minimum wage.

Spotify is the Same Story

Artist A told us that on average, he gets around $1 for 300-400 monetized streams. Monetized streams are plays that have some sort of advertisement running. Payout for non-monetized streams is lower. Even if we take the best case scenario, which means all streams are monetized and you get $1 for 300 streams, it amounts to 20 paise per stream - pretty neck and neck with Apple Music.

And YouTube is Just Sad

Bloomberg ran an article earlier this year on YouTube stars and how, even if you have half-a-million subscribers, you could still end up earning pennies. To understand that dichotomy, let's first summarise how YouTube pays content creators. YouTube channels are paid for the ads shown before or during their videos. YouTube splits the profit from ads, with 55% going to content creators. Simply speaking, if a brand is paying $2 to YouTube for running an ad on its platform, YouTube gets 90 cents while the channel-owner gets the rest. However, in the real-world, things are not so simple. One, not every stream of your video will have an ad running. Two, ads are dynamically priced on YouTube, meaning the price of ads fluctuates between channels, time of day, engagement rates etc. To cut to the chase, on average, YouTube pays $1 for 1,000 views. In the Indian context, that translates to Rs 63 for 1,000 views. Thus, to earn Rs 10,000 per month from YouTube, you will need a whopping 1,50,000 views, every month! To make things worse, the disparity in viewership between top content creators on YouTube and others is widening. In 2016, top 3% content creators on the video platform accounted for 90% views. The rest of the views were scattered between the remaining 97%. To put it into perspective, if you are not in the top 3% on YouTube, you are most likely to get around 500 views per month.

The Argument of Volumes

Streaming services do not have a linear business model on the artist side of things. While the exact model remains under wraps, most streaming services account for the number of plays a track gets to calculate artist payouts. For example, if your track gets 10,000 plays in one month and 15,000 the next, the effective payout for the latter month will be slightly higher. A lot of other factors play a part, as well, when it comes to how much artists get from streaming services. For instance, the more number of tracks you have on a streaming app, the higher your payout will be, provided all tracks get decent number of plays. Despite that, given the low figures, depending on music sales to make a living seems to be a foolhardy approach, at least for independent musicians. We did try reaching out to signed artists to get a sense of the bigger picture. However, none of the signed artists could tell us exactly how much they made from streaming alone, since record labels combine earnings from all the sources when paying artists. *We tried contacting Saavn for official numbers but couldn't get through* 

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