This is how you can hack your streaming royalties.
Earlier this year, DMN starting asking artists and labels to share their streaming royalty statements, which unearthed a pile of incredible per-stream statistics. That’s part of an ongoing data-sharing project to battle the incredible lack of transparency in the streaming music space (and, please send your royalties to news@digitalmusicnews.com to share with the community, confidentiality protected).
The statements we’ve received so far include a rock band from France, an indie label from Quebec with 2.5 million YouTube streams, and an ‘average American band‘. That complemented earlier statements from a Grammy-nominated songwriter, one of the first Tidal royalty statements, and a blunt statement from Lady Gaga’s ex-manager on major label royalties. By the end of this, we’re hoping to publish a vast tranche of data that helps everyone figure out what they should be getting from their streaming plays.
We’re just getting started on this project, but things are starting to roll in from different corners. That includes the results of this very interesting experiment from an indie rap label, which unearths some major payout disparities that can (and should) be taken advantage of. Basically, what the head of this label found out is this: different streaming platforms are paying wildly different rates, with some smaller services paying far better than others.
But the differences are oftentimes extreme, making it possible to dramatically improve your streaming payouts by focusing on these higher-paying platforms. The result is more money for your artists, right now.
OK, so let’s get started on how to re-tread your digital distribution to make this happen.
Step 1: De-emphasize lower-paying platforms like Spotify and YouTube.
For starters, Spotify payouts are really bad: according to most royalty statements we’ve seen, Spotify typically pays less than half-a-penny per stream, and often less than one-third of a penny. This is driven by a lot of factors, including huge numbers of free, ad-supported plays, and lots of money siphoned off by major label special deals. That includes preferential, lower-cost ad units for major labels, as well as upfront cash advances (though the emphasis by big labels in more recent years has been on grabbing ownership shares). The end result is that upstream cash is taken off the table before smaller labels can claim it, driving per-stream revenues into the gutter. Meanwhile, major label artists often have a difficult time getting paid on Spotify streams, making this entire platform very difficult to monetize except for a core group of insiders, which includes major labels.
Now, Spotify is one of the largest streaming music platforms on the planet, and that can translate into exposure. So, it may be unwise to yank your content from Spotify if you’re anything smaller than Adele. And get into enough plum playlists, and that can create a big story for the right artist. It can also translate into some cash, and there are definitely examples of this (Nashville-based artist Perrin Lamb is one). But these aren’t windfalls, according to the experts we’ve talked to, and are mostly about gaining new fans (that you can monetize some other way).
Which brings us to YouTube, which is notorious for being the worst-paying streaming music platform on the planet. Basically, there are two forms of monetization on YouTube: direct music video matches and those picked up by ContentID. Both completely suck, and if you don’t believe that, take a look at this royalty breakdown from a Canadian label with 2.5 million YouTube plays.
YouTube (proper music video plays): $0.001005 Canadian ($0.000794 US) per stream.
YouTube (Content ID): $0.001342 Canadian ($0.001061 US) per match.
In total, the label earned less than $2,000, which is part of the reason the entire music industry is now declaring war against this platform. That doesn’t mean pull your content off of YouTube (because even that can be difficult), especially given how many people are on the platform. But it does mean to give up any hope of making real money off this platform.
There’s just no money on YouTube.
Step 2: Hack better-paying platforms like Tidal and Groove Music.
Back to the indie rap label mentioned earlier. The head of this label decided to put his music on as many different platforms in as many different countries as possible. And, here’s what this person found over a multi-month period on both Tidal and Groove Music (owned by Microsoft, also referred to as Xbox Music and formerly Zune Music).
As you can see, both of these platforms delivery wildly better payouts per stream. While Spotify is rarely getting over $0.005 (half a penny) per stream, Tidal and Groove are consistently delivering multiples of that. But even at its worst, Tidal and Groove are delivering 2 cents per stream (see Germany), but sometimes hitting as much as a full-blown $1 per one stream (see Sweden and Ireland).
But even the worst payouts are at least double the best payouts you’d get from Spotify.
These aren’t typos, rather, they are the essence of this hack. These payments are multiples better than Spotify and YouTube, even for smaller artists. This is a loophole that smart label managers and artists are starting to recognize.
And, it should be mentioned that none of the artists on this label have hit it big yet (or have any huge hits).
Step 3: Exploit Temporary, High-Paying ‘Accidents’
While we’re on Groove Music, it should be mentioned that there are some strangely high payments being doled out right now. These are probably shorter-term anomalies while these platforms get out of their early stages, but they can be exploited to great gain right now (as in, do it now).
Take a look at this royalty breakdown involving Groove Music, from the same label manager (using songs from different labels).
Yes, that’s right, some of these streams are paying $2+ dollars per stream. It’s right there in the statement, for one stream. Yeah, it’s messed up, but finally it’s messed up in artists’ favor. “The streaming system is seriously flawed,” the person sharing this data told us. “How can they pay more in a per stream royalty rate than it actually costs to simply download the single and own? LOL. But hey unlike most of the people commenting on your posts, the labels I help aren’t complaining.”
Step 4: Move onto other, smaller, paid-only platforms.
Abnormal upper-end blips aside there’s a reason why Tidal and Groove offer superior payments to artists: they are smaller and paid only. That means every stream is counted against a paid pool from a smaller group of users, without the masses of free. That smaller group in turn triggers a smaller number of streams, with (numerator over denominator) produces a far bigger payout per stream.
Yes, Spotify has 30 million paying subscribers, but the problem is with the 70 million free users. And Spotify doesn’t pay artists that attract paying subscribers better, even if 100% of your fans are premium users. You, like every other label and artist, get lumped into the low-rent pool, dragged down by ‘freemium’ users. “We have GLOBAL distribution to all available stores even Deezer which is not yet available in the USA,” our source relayed. ”
“However, why would we promote music to platforms that pay $.0007 per stream?”
Speaking of global, it’s important to get into as many different countries as you can, because you never know where things can pop. And, have you tried Google Play? Here’s a breakdown from 2014, so it’s a little dated, but it also illustrates the principle at hand: smaller paid platforms, spread out to different countries.
Again, this blows away anything at Spotify, YouTube, or other large, free-access platforms like Deezer.
Step 5: Promote and Monitor.
Another key aspect of this strategy is to stop wasting your time promoting your content on crowded free platforms, while dedicating greater time to promoting the niches to draw greater revenues. Then, after bull-charging the little guys, monitor like crazy to see where your biggest gains are coming from. You will be pleasantly surprised.
The upside will totally depend on your content and the extent of your campaign, though one digital distribution exec we spoke with estimated that a conscientious label or artist can easily expect to quintuple their revenues in a matter of months. That is, after spending about an hour re-tooling your strategy and approach.
Good luck! I hope these hacks help you make a lot more money off of streaming!
The post How to Quintuple Your Streaming Royalties In About One Hour appeared first on Digital Music News.