Just How Much Does Rhapsody Pay Artists?

This post comes from David Harrell who blogs from the perspective of a musican who has self-released 4 albums with The Layaways at DigitalAudioInsider.

Last week, Paul Resnikoff of Digital Music News asked some basic questions about how much the music streaming services pay labels/artists. He had a hard time getting detailed responses from any of the firms he contacted, including Rhapsody. Here's how I'm paid for my self-released albums in the Rhapsody catalog:

1. A penny per stream. For albums distributed by CD Baby and TuneCore, I receive one cent per listener stream. CD Baby, which uses a commission business model, takes a 9% cut, resulting in a .91 cent payout per stream. TuneCore, which charges an annual maintenance fee for each album, passes on the full one cent. This one-cent rate has remained steady and unchanged from September 2004 to the present.

It's certainly possible that the major labels were able to negotiate a higher per-stream payout rate. I doubt, however, that any artist signed to a major label is receiving more than a cent per stream, as the payout to the artist depends on the recording contract. My guess is that most major-label artists ultimately receive a small fraction of a cent for each Rhapsody stream.

2. As mentioned in Resnikoff's post, there are also payments to songwriters and music publishers, in addition to fees paid to labels, to consider. Starting in late 2010, payments for "Rhapsody Mechanical Royalties" began showing up in my CD Baby account. Here, however, the per-stream amount varies from month to month and I've seen payments ranging from .13 cents per stream to .28 cents. The payout rate appears to correlate roughly with the date, with higher rates for more-recent performances.

3. Finally, small payouts show up for "Rhapsody Inter" on my BMI statement, approximately .16 cents per performance. I assume these payments are for plays by non-U.S. Rhapsody subscribers. I'm a self-published songwriter, so I receive all royalties paid to BMI for performances of my songs. If I were signed to a publishing company, half of those royalties would be paid to the publisher.