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Beats Music Royalty Report Reveals Low Subscriber Numbers, Even Lower Payments To Artists

image from cdn.funkyspacemonkey.comAn early royalty statement shows Beats Music with fewer than 111,000 subscribers as of March 31st and payments to songwriters of $0.000126 per stream. The document, shared by David Lowery on The Trichordist, arrives amidst strong signs that Apple acquiring Beats, including its popular headphone business, for a reported $3.2 billion.

beatsThe royalty report is a snapshot of Beats early days, and does not include many of the subscribers that the music streamer added with its AT&T family promotion or any acquired since adding in-app subscriptions to its iOS apps. But it does paint a picture of a music service that did not instantly grab consumer interest, despite an aggressive launch and multi-million marketing campaign.

But what really bothers musician and songwriter Lowery, is the royalty rates that Beats is paying. "Never mind that Beats only has 110k subscribers," he writes. "Is Apple Buying Beats simply because of the ridiculously low royalty that songwriters are paid?"  

ANALYSIS:

While Lowery scores points for sharing the royalty statement, his resulting arguments fall short on two fronts.  The rights and rates negotiated by Beats are almost certainly not transferable to Apple, if the sale is completed.  And the manner in which songwriter payments are calculated is an industry-wide issue and not specific to Beats. 

In fact, this likely sale could give the music industry a huge opening to restructure how streaming music services pay. But, as with a myriad of previous missed opportunities, that's a chance the big players are unlikely to take.

Beats itself is even more unlikely to lead any charge to improve compensation. As one commenter wrote, "The Chairman of the World’s Largest Record Company co-owns and co-founded Beats... Should we expect that he Is FIGHTING for artists’ compensation?"

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