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Beats Music Trumps Spotify In Artist Payouts

Beatsmusic-spotifyIn terms of subscribers and market share, Beats Music (acquired by Apple as part of its purchase of Beats in May of last year) is way behind Spotify. But there's one area where Beats Music appears to be ahead - the per-stream payout to artists/labels

Guest Post by David Harrell on Digital Audio Insider

The first payouts from Beats Music just appeared in my CD Baby account. After adjusting for CD Baby's commission, for December 2014, we received 1.801 cents per stream. For comparison, our per-stream payout from Spotify averages out to 0.428 cents for the past few years: 

Beats Music payout vs. average Spotify payout

On its support site, Beats states that its payout rate will higher than that of other streaming services as, unlike Spotify, it has no free option:

We pay higher royalties than the other services because we are a paid subscription-only service (in other words, we have no free version of our service that we have to subsidize).

The payouts we've received from Spotify have varied greatly, as some are coming from premium subscribers and some from free subscribers. For the latter, the payout amount is based on a share of advertising revenue and is very small. However, our initial payout from Beats included two rates -- approximately 1.926 cents for some streams and 1.300 cents for others. 

My only guess here is that the higher rate is for listens by monthly subscribers who pay $9.99 a month (or $119.88 a year) and the lower rate for listens from annual subscribers who pay $99.99 a year, though the payout difference is greater than the pricing differential for the two plans.