Music Streaming Services: Who Wants to Be a Streamionnaire?

Daniel Sheppard

Jul 8, 2020

Music streaming services are here to stay, that much is clear. But with the constant outcry that artists aren't being paid enough for their streams, we thought it would be worthwhile to look at the various platforms to see just how much buck you get for your banger on each, and we picked a million streams as the comparison number, because it just sounds cool, y'know? You can tell your mum you made it, brag to your friends that you're a millionaire, all that jazz. Though as it turns out, you'll probably want to drop the mic and leave quick, before they ask you how much money you've actually made.

Relying on music streaming services to pay your bills seems a risky proposition. However, they offer important side-benefits when it comes to promotion and exposure, and providing you with more opportunities for touring, collabs etc.

Before we dive in: We should make it clear that the analysis is based on estimates, meaning you shouldn't hold us to our word if the number on your pay-out cheque is different to ours. The problem is that streaming revenues vary not just between the different music streaming services, but within each service as well.

Your music streaming services are not the same as mine

#1: For starters, it depends on where your music is being streamed, as subscription fees vary around the world – for example, a Spotify Premium Family subscription costs $14.99 in the UK and $2.40 in India, meaning that a million streams by users in India doesn't bring in the same amount as a million in Britain. 

#2: Furthermore, music streaming services differentiate whether your music is streamed by free or subscription users, whether you're signed to a label and have to split the revenue with them or not, how much you're paying the distributor to get your tunes on the music streaming services in the first place, whether you're a solo act or have to share the revenue among four band members, etc. All in all, it's not an exact science, as evidenced by the fact that in January 2019, Spotify reported it paid out between $0.00331 and $0.00437 per stream. It might seem a negligible difference, but trust us, the pennies do add up.

#3: Another factor to consider is the availability of individual music streaming services in your region, as well as the exposure and user base they offer. Among the major ones, Spotify leads the pack when it comes to subscriber numbers, with 130M paying subscribers (and a further 156M free users), ahead of Apple Music with about 70M paying subscribers, meaning not only are you likely to hit the one-million mark faster on Spotify, you also get more promotional exposure. In fact, its ubiquity, user base and general reach might be one of the biggest things going for Spotify.

In January 2019, Spotify reported it paid out between $0.00331 and $0.00437 per stream. It might seem a negligible difference, but trust us, the pennies do add up.

What does a million streams get you?

Alright, now that we've established that it isn't an exact science, let's get crunching! Using the generally established royalty pay-outs for music streaming services on the US market, this is what we've come up with.

On the surface, it seems pretty clear, right? 

With the highest pay-out, it makes sense to push your tunes on Napster and start raking in the cash. Of course, the trick is in hitting that million, and that's far from easy. Not only is it far from a given, as any struggling artist will tell you, it's probably going to take a while. Consider the story that made the rounds a few years back, of an unnamed Australian band that published their Spotify royalties after hitting a million streams. The then-freshly signed act had been building up buzz, they got onto a few of the "money-making" Spotify playlists that boosted their visibility, they had approval from critics; in short, things were going their way as much as any up-and-coming music act can hope for. So after accumulating a million streams, they cashed in nearly $5k, as per Spotify's pay-out scheme. The kicker? It took them 2.5 years to hit a million streams. 

Admittedly, that was in 2016 and music streaming services have definitely picked up steam since then, with the number of users growing exponentially. But that was also the year Spotify hit 100M users, while Napster had a "paltry" 3.5M, meaning that even had the band in question been on Napster with the higher pay-outs, they'd probably still be on the hunt for the seven-digit milestone.

The outsiders: YouTube and Soundcloud

SoundCloud Premier and YouTube merit special mention, as unlike most other music streaming services, they allow you to monetize directly – you can upload your music straight to the platform and start cashing in, without having to go through a distributor. However, as usual, there's a catch – SoundCloud's pay-outs are based on the revenue they generate from ads or subscriptions, meaning you don't earn from "free" listeners or adblock users. And of course, the number of users is much lower than on, say, Spotify, especially when it comes to certain genres. 

For example, as evident from our Viberate PRO tool, indie musician Phoebe Bridgers, whose recently released album "Punisher" is already tipped to be one of the best records of the year, received more than 130k new followers on Spotify over the past 12 months, but just 1,500 on SoundCloud. With 144k plays on the latter over the past year, she's earned just $430 – if all the plays were even monetized, that is.

Meanwhile, though not one of the traditional music streaming services as we've come to understand the term, YouTube is undoubtedly one of the main ways people all over the world listen to music, and it offers monetization as well. Unfortunately, its pay-out is abysmal compared to the others, and though you can upload music directly, you need a certain amount of subscribers and views before you can start monetising, meaning up-and-coming artists are going to either have to put additional work in, or go through a distributor with a suitable channel. In both cases, the final pay check will be even smaller.

SoundCloud Premier and YouTube allow you to monetize directly – you can upload your music straight to the platform and start cashing in, without having to go through a distributor.

Music streaming services: Not great, not terrible

Unless you make it big with a viral hit, relying on music streaming services to pay your bills seems a risky proposition – or a long-term project at the very least. However, as mentioned, music streaming services offer important side-benefits when it comes to promotion and exposure, boosting your visibility on other channels and providing you with more opportunities for touring, collaborations, etc. 

For example, Australian musician Tones and I has had a big year on the back of her smash hit "Dance Monkey". As is often the case with such unexpected breakthroughs, her career has hit a downward trajectory. Her fanbase on most channels is growing at a slower rate, her engagement on social media is declining after an incredible spike, and her follow-up tracks are having trouble breaking 10M views on YouTube, much less the 1B of "Dance Monkey". 

On Spotify, however, the story is quite different – her fanbase there is growing day by day. Despite the general public apparently gradually losing interest, her Spotify followers remain strong, undoubtedly also due to the platform's features, such as curated playlists, notifications and, above all, the simplicity and user-friendly design of the app itself. 

All in all, it seems that focusing on just one of the music streaming services on offer isn't the correct way to go about guaranteeing a regular payday. Going on as many platforms as possible and trying to cobble together a decent cheque from all them seems smarter than hoping you get lucky and make it big on one. In addition, such an approach increases your exposure among different fan communities, markets, etc., which also brings us to our final point: 

Think of music streaming services as a means to an end, not an end in itself, especially in the early stages of your career. Use them to gain visibility and find new opportunities, but don't just rely on them for your daily bread and butter.

It's not going to be easy, but when all the pieces fit together, your success will be clear as day even to your mum.

Cover photo: Toa Heftiba (Unsplash)

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We dived into the cases above with Viberate's music analytics. It enables music pros to make smarter decisions with data-based insights. You can scour the Charts for information exactly like above, as well as check more specific information on Artist Pages.

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