When you listen to a song on Apple Music, the artist gets about half a cent. What this means is that if you’re paying $10 per month for a subscription of Apple Music and you only listen to one song that month, Apple keeps the overwhelming majority of that $10.

The other day I was talking with a friend who’s a professional composer, musician, and performer. He made more money from his albums before streaming services existed. Back then, people had to buy their music. Now they can just stream it at half a cent per play, which is really a step down. This brings up a fascinating idea. Instead of Apple paying artists a fixed amount per stream, what if it instead kept 30% per month1 and then paid the rest to the artists in the proportion that their music was listened to? In the above scenario where a subscriber is paying $10/mo and only listens to one song, that artist would pocket $7.00 for that month from that subscriber. In the scenario where the person listened to 20 different artists in equal amounts, that $7 would get split 20 ways at 35¢ apiece. As an artist, the only way you’d be paid less than the current paradigm for a stream is if a customer listened to more than 1,400 songs in a month.2 As long as there is a majority of customers listening to fewer songs than that per month, then artists will get paid more per month with this proposed system than the current one. What artist wouldn’t want to get back to pocketing the same amount they were making prior to the advent of music streaming?

Obviously this would cut into Apple’s amount of revenue, but that’s the whole point: with Apple Music, Apple is making too much money. People complain about Apple charging too much for stuff all the time and I usually disagree with them because in a free market, a company can charge whatever it wants for its stuff. But Apple Music is different because it’s not selling Apple’s stuff. It’s selling other people’s stuff. Apple is only the vehicle.

My friend’s idea gets the artists back to making what they were before music streaming existed. Think about it this way. Right now, Apple is making more than 30% of the money that passes through Apple Music. In theory there’s no upper limit. If a month were to pass in which everyone stopped listening to music, Apple would pocket 100% of the subscription. That just doesn’t seem right. Thirty percent should be more than enough for providing the market place.

When you buy an album on iTunes, you have a guarantee that only 30% of that is going to Apple and the rest is going to the producers and artists. Why can’t it be this way for when you rent music via an Apple Music subscription?

  1. Thirty percent is the amount that Apple makes when a song or album is bought outright on the iTunes Store. ↩︎
  2. I’m arriving at that number by dividing 7 by .005. At a $10/mo subscription in which Apple keeps 30%, that leaves $7 to pay out to the artists, and .005 being the current amount of payment per stream. ↩︎