Music labels get 73.1pc of payouts from streaming services while artists get almost zilch

6 Feb 2015

Music labels get to keep 73.1pc of payouts from streaming services such as Spotify and Deezer, according to new figures from French music trade group SNEP, leaving very little for artists after tax.

A study of the market by Ernst & Young (EY) on behalf of SNEP, which counts among its members Warner, Sony and Universal, found that out of a €9.99 music subscription, as little as 68 cents end up going to the artist.

As much as €4.56 goes to record labels, €2.08 goes to the streaming platform, €1.67 is in tax, €1 goes to publishers and songwriters and a measly 68 cents finds its way into artists’ pockets.

In that analysis rights holders get to take 46pc of the revenue from a monthly subscription.

However, if you remove the streaming platform’s fees and tax from the equation and look at the royalties, labels get 73.1pc of the take while artists get just 10.1pc.

Bum note for artists

This is most likely what angry Taylor Swift was getting at when she removed her entire back catalogue from Spotify in Autumn of last year.

According to Music Business Worldwide an analysis of profit margins paints an even bleaker picture.

While you would imagine that streaming means all the physical packaging costs are removed from the sale of music SNEP and EY labels and digital platforms just make a 5pc net income from monthly subscriptions.

That amounts to just 26 cents net profit from each subscription for labels and just 10 cents for the streaming platform.

If this is the case then Taylor Swift had every reason to want to shake off Spotify.

Empty pockets image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years