How Apple Music Classical May Actually Influence The Pop Artist Royalty Model
The majority of people in the music business feel that the current royalty model used by Spotify and most other music streamers is broken, yet the user-centric model that tries to fix it hasn’t been much better, at least not yet. Believe it or not, the real agent of change in pop royalties might come from classical and orchestral music, and we’re about to find out when Apple Music Classical launches soon.
The Current Royalty Model
First of all, understand that the way streaming royalties work in most cases all depends on market share. All the money that Spotify (and most other streamers) get from subscriptions for the month are pooled together, and after the streaming service takes its cut, then it’s divided up. It’s not exactly fair though as the artists that are the most popular and get the most streams, tend to make more per stream than artists not as popular for that month.
Another level of complexity is were the money comes from, since the subscription price for the service is different in each country. If most of your streams come from the US where each subscription is $9.95 you’ll make a lot more money than if they come from South Africa where they pay only $3.51 per month. It’s for these reasons that no two artist royalty statements are ever the same (of course there’s that little item of the artist’s deal with the label as well).
User-centric royalties tries to make everything more fair by tying the royalty rate to the user. For instance, if a user listened to Taylor Swift 80% of the time during the month, then Ms. Swift would make around $8 from that user based on a $10 per month subscription, while all other artists would make proportionately less.
In truth, this has only been tried half-heartedly so far with Tidal, but only 10% of the user revenue was labeled as user-centric. For the more than 70,000 artists that signed up for the program, the average payout was $7.14, or much less than they would have been paid under the old royalty system. As a result, the trial was scrapped earlier in the month. Expect another try or two at this soon though.
Classical Is Different
Classical music differs from pop music in many ways, but a major one is that all of the tracks are significantly longer. Almost all streaming services count a stream the same way – as long as someone listens for 30 seconds it counts as a stream, but you’re paid the same amount regardless of the length of the song. It doesn’t matter whether the song is 31 seconds long or 31 minutes long (quite common for a Classical piece), the payout is same. As a result, this royalty model just doesn’t make much sense for Classical music from a business standpoint.
Another problem is that many Classical pieces consist of many movements, and there are many versions available from different orchestras and conductors. Current streamers don’t have the capability to sort this out sufficiently for an orchestral music lover, as they’re geared to the short stand-alone pop song.
There’s A New Game In Town
A streaming platform called Primephonic was launched in 2017 specifically to address these problems (you can listen to an interview with CEO Thomas Steffens on my Inner Circle Podcast #273). It was the go-to service for Classical and orchestral music lovers until it was purchased by Apple in 2021, which then was promptly it shut down. Now the service has been folded into the new Apple Music Classical service that will launch on March 28th.
The service is free to current Apple Music subscribers, offers the worlds largest orchestral music catalog at 5 million tracks, has tracks available in high-resolution audio up to 192kHz/24 bit and immersive audio, and has a dedicated database so you can easily find exactly what you want and know exactly what’s playing. Plus it displays information about the piece, composer, orchestra and conductor while a piece plays.
That’s all great for Classical music lovers, but how does it apply to pop music artists? Primephonic was built on the premise that the artist should get paid according to how long the user listens. It’s sort of like the user-centric model, only instead of the percentage of your subscription each month, it’s based on the time you listen.
That means that if a user listens to a movement for 40 minutes, the artist gets paid more than if the user listens for only 4 minutes. This makes total sense from an artist’s point of view, but that said, there’s no official news yet on exactly how Apple intends to handle the royalty payout. At this point we assume it will be based on Primephonic’s model.
How Pop Music Royalties Could Change
If this is still the case, imagine the effect it could have on non-classical pieces if the consumption model is adopted.
- We’d hear more songs that were longer because the artist could get paid more.
- Intros, solos and bridges would be back in style as ways to make a song longer.
- Songs would get more interesting because artists and producers would make an extra effort to keep you listening as long as possible.
- There would be less of the loop-based, write-by-numbers songs that are easy to crank out now, because you’d have to really understand music and develop a new writing style to keep that song interesting.
Now we’re nowhere near adoption of the consumption model for anything but Classical music, and it might not even be a discussion point anywhere in the business yet. But it’s a delicious thought that maybe a new trend both on the business and artistic sides of music isn’t as far away as many seem to think.
Like I said, maybe it’s way too premature to think about this seriously, but Apple Music Classical has the ability to change music in more ways than anyone thinks.