How to earn money with virtual concerts

After we’ve shown you recently how greatly the Pay Per Stream (PPS) at Spotify, Apple Music, and Deezer can vary depending on the country, we will now compare the three streaming services directly. To sum up our findings briefly: Apple Music always pays more than Spotify. Deezer, too, always has a higher PPS than Spotify, except in Israel. And finally, with the exception of 8 countries, Apple always pays more than Deezer, as well.

Spotify vs. Apple Music

On average, Apple Music pays 2.63 times as much as Spotify. In our last assessment, it was 2.84 times as much. In most countries, we observe a factor ranging between 1.5 and 2.5. In various Balkan states and in Jordan, it can even be between 6.34 (Serbia) and 10.43 (Macedonia). In the English-speaking countries, the factor is always below average and ranges from 1.54 (USA) and 2.29 (Ireland).

Spotify vs. Deezer

These two services are easy to compare, since both have a premium subscription as well as a free subscription option. In most countries, Deezer’s PPS is at most twice as high as Spotify’s. In 16 countries, you even get more than double the amount per stream, primarily in Eastern European countries but also in the US. Aside from the US with its factor of 2.63, the other English-speaking countries are either average or slightly below average.

Apple Music vs. Deezer

As expected, you will receive more at Apple Music than at Deezer, since the former does without a free subscription option. However, it is only 38% more on average. In 8 of the countries we examined, you even get more per stream at Deezer than at Apple Music. In most countries, the difference is not too big. Only in Jordan, Italy, Macedonia, Bosnia, and Israel you’ll find a factor higher than 3. In the UK and Ireland, the factor is slightly above average, in Australia you would get approximately the same amount from either service, while for streams from the US and Canada, Deezer actually pays better than Apple Music.

For those who find these PPs numbers and factors to be too abstract, we present the concrete comparison between the English-speaking countries. For one million streams you would receive the following amount of money (in USD) in each country:

The next table shows you how many streams it takes from each country to get to USD 4,000:

The comparison clearly shows that it takes a much greater number of streams on Spotify to receive a good amount of money. But since Spotify has significantly more users than its two competitors, most musicians still receive their biggest share from Spotify.

Here find the complete assessment covering 45 countries:

After our recent assessment of Spotify’s and Apple Music’s numbers, we have now analyzed Deezer’s Pay Per Stream (PPS) for the first time. Here too, we aim to show you how much influence the origin of a stream can have on the payout. It is not much of a surprise that Deezer’s numbers, too, vary greatly from country to country.

Surprising frontrunner

We were rather taken aback to see which country showed the highest PPS: Bulgaria is on first place by quite a large margin – this despite the fact that it can only be found somewhere in the midrange at Spotify. We are already curious to see whether this will be reaffirmed in our next assessment or whether this is just a single outlier.

What also stands out is that a whopping three Arabic countries, Qatar, UAE, and Saudi Arabia, are among the top 10. The Ivory Coast, meanwhile, represents Africa in the top 15. Apart from these, you’ll find some of the usual suspects in the front rows, such as the US, Austria, and the Scandinavian countries. As is the case at Spotify, Turkey is again at the back of the list, as are various Asian, African, and Latin American states.

The English-speaking countries in comparison

In contrast to Spotify and Apple Music, Deezer sees the US rank first among the English-speaking countries. While Australia, Ireland, New Zealand, and the UK are pretty much neck and neck, Canada, as we’ve also seen before, brings up the rear.

PPS twice as high as Spotify’s

Assuming you had the same number of streams in each of the 66 countries we assessed, you would receive $4,776 per one million streams. Even though Deezer offers add-supported subscriptions, as well, their PPS is about twice as high as Spotify’s and only around 25% lower than Apple Music’s. We will compare these three streaming services in more detail in an upcoming post.

Deezer wants user-centric model

In a recently released video, Deezer’s CEO emphasizes once again that his company absolutely wants to make a switch to the user-centric distribution model. However, he also points out that this will not be possible without the labels, distributors, artists, and fans. He is therefore asking for people’s support for this model that Deezer views to be fairer and more transparent. It will definitely be interesting to see what impact a system change would have on the PPS.

The PPS of 66 countries in comparison

Here you can find the complete list with all 66 evaluated countries. For each country you can see the Pay Per Stream (PPS) as well as the extrapolation of how much you get for one million streams from the respective country.

Just as we did recently with Spotify, we have now given our Apple Music assessment from last year an update, too. The reasons are the same as the ones for Spotify: One, the Pay per Stream (PPS) is always fluctuating, and two, there were some more countries to add here, as well.

The assessment can help you to determine which countries you could step up your marketing game in but also to better understand how Apple Music pays you as an artist.

PPS below the announced $0.01

Apple Music has recently mentioned in an announcement that their PPS is at $0.01. However, this number only takes standard subscriptions into account, and not any of the cheaper ones, e.g., family subscriptions. They also add up the payouts for the master and publishing rights, while our assessment is solely focused on the payout for the copyright owners, which will then be forwarded to the artists via the distributor.

Even though Apple Music clearly pays more per stream than the majority of their competitors, they are still pretty far away from those $0.01.

On average across all countries, Apple Music pays $0.00599265 per stream. As mentioned above, this number only accounts for the master rights, which make up 52% of the generated revenues. If we add the 14.7% that are paid out for the publishing rights, we would thus get $0,0077.

Based on our calculations, it is only the top 23 countries that, when combining master and publishing rights, receive $0.01 or more per stream. For the US, Canada, Germany, or France, for instance, this is not the case.

PPS decreased in majority

Generally speaking, our new assessment has shown that the PPS in most countries has decreased since our last assessment. In many states this difference is only minimal, but in others it is in the double digits. The countries suffering the biggest losses are, among others, Japan, Portugal, Indonesia, the US, Hong Kong, China, Chile, and, as it was the case with Spotify, Turkey.

The average payout across all countries has decreased, as well. In our last assessment, we calculated $6,872 for one million streams. Now, however, if you had the same number of streams in all the countries we examined, you would get only $5,992.65. The reasons for this are, on the one hand, as we already mentioned, the decreasing PPS in many countries, but on the other also the fact that we included 30 additional countries in our assessment this year.

Northern European countries on top

The decidedly biggest payout can be observed in Norway. The other Scandinavian countries, too, are among the top 10 along with the Netherlands, Ireland, the UK and Switzerland. While a majority of Central European countries can be found at the top also, the other end of the list is made up of African, Asian, and Eastern European countries, as well as a few Latin American countries. The US and notably Canada only fall into the midrange.

The English-speaking countries in comparison

If we only compare the English-speaking countries, we can see that the differences here are even more massive than at Spotify. In Ireland and the UK, you get about twice as much per stream than you do in the US and Canada, while New Zealand and Australia are sitting somewhere in between.

The PPS of 81 countries in comparison

Here you can find the complete list with the 81 evaluated countries. For each country you can see the Pay Per Stream (PPS) as well as the extrapolation of how much you get for one million streams from the respective country. In addition, you can see how high the number for one million streams was in our last evaluation and how high the percentual change is.

It has been almost a year since we last examined how much Spotify pays per stream and thus showed how extremely dependent these numbers are on the country from which each stream originates.

Since the numbers are constantly changing and there have been more and more new countries being added, we have once again analyzed mountains of data to deliver you the 2021 update on Spotify’s Pay Per Stream (PPS).

The goal of the assessment is firstly to help understand Spotify’s payout system. However, additionally, it can also give some indication on which countries might be well worth an additional marketing campaign launch. Obviously, in these deliberations, you should always consider the population figure as well, and not just whether the PPS is particularly high or low.

PPS increased in majority

The good news is that the PPS in many countries has increased since our last assessment. The bad news is that it has mostly decreased in countries where it was already low before. This primarily affects countries in Asia, Africa, and Latin America. But in most European and North American countries, the PPS is higher now than it was during our last analysis.

The average across all countries has slightly decreased, but this is mainly due to the fact that Spotify is now available in various new states, most of which have low subscription fees (as well as low ad revenues), and thus also a low PPS. If we assume that you had an equal number of streams in each of the analyzed countries, then you would receive 2,354.56 USD for one million streams. In our last assessment, this average figure was at 2,389.58

In addition, we did not include some countries in which Spotify is also available because we did not have enough data. In total, we analyzed the data from 94 countries, with the addition of various Eastern European countries.

South Korea and UK are the frontrunners

The clear frontrunner is South Korea with a PPS three times as high as that of the UK sitting second place. The reason for this is that there is no free option for Spotify in Korea, only premium subscriptions. Thus, it becomes clear what immense influence the free tier has on the PPS and also why Apple Music, for instance, pays so much more per stream than Spotify does. Other than the UK, the top ranks are exclusively made up of European countries, primarily from Northern Europe, as well as Switzerland, Ireland, and the microstates Monaco and Liechtenstein.

The losers

The country that suffers the most losses is Turkey, where the PPS has sunk by a whopping 30% since our last assessment. Now, Turkey is sitting on last place when compared to all the countries we examined. Other low ranks include various Eastern European countries, North African states, and Argentina.

The English-speaking countries in comparison

How big the deviations are from country to country becomes apparent if you look at the comparison between the English-speaking countries alone:

So, in the UK you would receive almost twice as much per stream than you would in Canada, for example, or 46% more than you would in the US.

The PPS of 94 countries in comparison

Here you can find the complete list with the 94 evaluated countries. For each country you can see the Pay Per Stream (PPS) as well as the extrapolation of how much you get for one million streams from the respective country. In addition, you can see how high the number for one million streams was in our last evaluation and how high the percentual change is.

Non-Fungible Tokens, short NFT, seem to be all anyone ever talks about at the moment – from the art scene to the music industry. iGroove Magazine has closely monitored this trend, but wanted to observe its development first instead of jumping on the bandwagon right away. Since the hype seems to persist, we show you in this posts what NFTs mean to musicians. We will start off by explaining the basics. But if you already have a good grasp on the subject, you can just skip the first part and continue reading below.

NFT: forgery-proof and unique

An NFT is essentially a unique, non-interchangeable key. So, in contrast to bitcoin or a bank bill, an NFT is one of a kind. If I gave you a 50 Dollar bill and you gave me one, we wouldn’t have the same bills anymore, but we would each still have 50 Dollars. This is not possible when you have an NFT, because it is unique.

NFTs make it possible for people to both collect and sell digital goods, which are stored on a forgery-proof (at least in most cases) blockchain.

We’re already familiar with this concept when it comes to physical creations: An artwork by Picasso could hang in a museum or in some rich collector’s home. At the same time anyone can buy a copy of a Picasso almost anywhere. But there is only one original and whoever owns it has a certificate of authenticity for it. Thanks to NFTs, this is now also possible for digital creations – no matter if it’s a JPG, GIF, MP3, meme, or anything else.

Digital files can be copied an infinite number of times, but thanks to an NFT, everyone now knows who owns the original. So, it’s not the digital work that is rare, but the token. Let’s assume someone bought a song as an NFT. That doesn’t mean that the buyer now owns the song. What they do own is the certificate, meaning the proof that they are in possession of the original. They can re-sell the NFT, but they don’t have the right to just do whatever they want with the song – unless this was specifically stated in the Smart Contract.

Earning money on resale

A Smart Contract sets all the details, e.g., who will get how much money from the sale of an NFT. For instance, it could say that 50% goes to the artist, 30% to the producer, and 20% to the graphic designer. Additionally, it sets how much money goes to the creator of the NFT in the case of a resale. For example: You’re selling an NFT for $ 10,000 and stipulate that you make 20% of any resale. The buyer then resells the NFT for $ 20,000, after which it changes hands for a whopping 100k. In total, you have now made 34k.

No NFTs without cryptocurrency

In order to set up or buy an NFT, you have to have a crypto wallet – meaning a place to save your cryptocurrency. After that you will need to buy some Ether (the second biggest cryptocurrency after Bitcoin) and put it in your wallet. A large number of NFTs are sold in Ethers and stored on the corresponding Ethereum blockchain. Finally, you will have to register at one of the market places for NFTs (Nifty Gateway, SuperRare, Opean Sea, Rarible etc.) and connect it with your wallet.

You need NFTs not only as a buyer but also as a seller, since you have to pay a so-called gas fee to mint an NFT.

NFTs: direct connection between artist and fan

When reading about NFTs, you will generally come across two different camps. One is euphoric and believes that NFTs are the future of the music industry and will replace labels and copyright collectives. The other thinks it’s not much more than a bubble in which crypto hipsters with too much money on their hands like to speculate. We want to present both viewpoints to you, as well as the current, and more importantly, future prospects, but also some of the stumbling blocks.

One of the biggest advantages of NFTs is the direct connection between artist and fan. The money flows from the fan straight to the artist, everything is stored transparently on the blockchain, and it can be reviewed by anyone. Other than the NFT platform, there are no more middlemen, and the artists get their revenues faster, as well. Additionally, as we have explained above, as an artist, you also earn money when the NFT is resold.

The fan has the option to support their favourite artist directly, and in return, they receive something that is one of a kind. Many hope that NFTs can bring back the value to music that it has lost through streaming. Nowadays, it’s not all that easy for someone to support their favourite artist financially. Out of their monthly streaming subscription only a small amount with lots of zeros behind the decimal point goes to the individual artist. And albums, merchandise, and concert tickets are not exactly things you buy every month either.

In addition to platforms like Patreon, NFTs thus provide a way to support an artist with a significantly higher figure.

At the same time, the artists have a way to offer their die-hard fans something truly special. Next to digital goods – from songs to videos to artworks – NFTs can also be offered for physical products like concert tickets, vinyl, or backstage passes. When it comes to NFts, we’re still very much at the beginning of the developments and are utilizing only a fraction of the opportunities available.

Share the success with the fans

Another area in which many see big potential is the sale of parts of the master and/or publishing rights. The musician here has the advantage of being able to receive a portion their future revenues at once. The fan can invest in the musician and even make some money off the success of their favourite artist, as well. NFTs could also become a type of fanclub, in which a fan could resell their membership and make money off it themselves.

But this is all still a long way off: the system is simply not ready for it yet. While the buyer does have the right to a portion of the royalties, they also have to know how to collect these. In most cases this is not possible to do over the blockchain, which is why copyright collectives, distributors, and labels still come into play.

The only time it’s possible is when the music is brand new and all the rights are owned by the artist themselves. Older releases usually have multiple parties involved, which makes things extremely complicated.

Thus, we’ve arrived at the stumbling blocks, because wherever new opportunities arise, there are always risks involved, as well.

High barriers for buyers and artists

Hardly a day goes by without news of million-dollar sales or superstars launching their own NFTs. But is art really what’s on the forefront here or is it all just about the collector’s value and thus also the speculation? Are NFTs truly valuable or does their value only come from people thinking they’re valuable, at least at the moment? What’s growing here – a bubble that will soon burst or a genuine, sustainable source of income for musicians?

Let’s first get to the main stumbling blocks: For anyone who hasn’t been dealing with cryptocurrencies for a long time, it’s not that easy to set up and sell NFTs. So, there’s a risk that artists are getting into some technology that they don’t completely understand. Even more problematic, however, are the challenges for the buyers. Few people have Ether in their crypto wallet and are hanging out in NFT marketplaces. Do you know someone who owns NFTs? Exactly. It will take years before they can truly establish themselves within the greater population.

Losses instead of high profits

Many also forget that it’s not exactly cheap to set up an NFT. As mentioned before, there is a so-called gas fee to pay, so you will quickly rack up a $200 bill before you even get started. If you then sell your NFT for a five- or six-figure price, then this is obviously not a problem. But with the media only reporting on all the successful, million-dollar sales, people often forget that many NFTs don’t find any buyers at all.

Chances are high that in the future, things will look similar to the pattern on Spotify and YouTube, where a very small number of people rake in millions of streams/views and the majority has less than 1,000. It’s very probable that only a small number of people will be able to make big bucks with NFTs, while the large majority will earn little to nothing.

Another risk that should not be underestimated are the marketplaces that the NFTs are tied to. If one of them goes bankrupt, the NFT that was bought will vanish into thin air, as well.

So far, only around 150 musicians have sold NFTs (although this number is obviously increasing rapidly). Most of them are extremely well-established and have a strong fanbase. Their NFTs are often sold for astronomical prices that a normal fan could never afford. At the moment, NFTs are therefore primarily a playground for superstars on the one side and crypto nerds and other people with a well-lined purse (or rather, a full crypto wallet) on the other.

NFTs are still a long way from entering the mainstream

While this hobby of the crypto and finance buffs is making its way into the mainstream, it hasn’t quite gotten there yet. It still remains to be seen whether NFTs are more than just an object of speculation. So far, instead of more democratization in the music industry, they have only given rise to a few winning parties. When Grimes sells NFTs for 6 million dollars, it benefits neither the starving artists nor the music industry as a whole. In order for independent artists to truly be able to make a profit, a mass market needs to emerge and prices need to settle at a reasonable level.

But in this whole discussion, we haven’t even mentioned the most significant drawback: Since NFTs are based on blockchain-technology, they are incredibly energy-intensive. So, anyone who cares even a little bit about climate change should keep their hands off them until the industry has found another way.

But in the other aspects, too, we’d say: without a huge and more importantly, well-heeled fanbase, you should focus more on other monetization options rather than NFTs. However, you should also still keep an eye on their development.

More and more artists are celebrating major successes without major labels, and many are now seen leaving big record companies. We’ll show you what advantages come with being an independent artist.

Major labels are still a big force, no question about it. Last year, the music industry made a profit of 23.1 billion dollars worldwide, 65.5% percent of which went to major labels. However, this share has been steadily declining; back in 2019, it was 66.5%. A similar situation can be observed at Spotify, where the portion of stream revenues that went to major labels dropped from 70.3% to 68.9% between 2019 and 2020. And yet, major labels continue to enjoy an abundance of power and, above all, financial resources.

Indie instead of major

Nevertheless, more and more artists are either staying on the independent route or leaving the major labels. We’re not just talking about smaller artists either, but also an increasing number of those that any major label would jump at the opportunity to sign. What drives established artists to leave the cemented structures and financial resources of major labels to work with a distributor instead?

• Rights to the music: When working with a major label, you have to give up the rights to your music for a certain (or even undetermined) period of time. However, when you’re with a distributor, you maintain those rights in your own hands.
• Flexibility: You’re usually tied to a major label over multiple years or releases. But when you make a release via an independent distributor, you can switch anytime.
• Cuts: Depending on the distributor, you only have to hand over a small percentage of your revenues or pay a fixed amount per release.
• Of course, you won’t get the same services as you would from a major label. But you can decide for yourself how much, for instance, you want to spend on promotion, marketing, etc. As an artist, you can put together the types of services yourself and don’t have to resort to the full package that the major labels offer.
• Transparency: With most distributors, you have a detailed inside look into the numbers and trends. This way, you gain a better overview of your finances and can plan more confidently.
• Regular payments: While some major labels only pay their artists every couple of months, independent distributors normally credit the amount in question to your account every month.
• Last but not least, you have full artistic freedom. Unlike with a major label, nobody will be butting into your creative process when you’re working with a distributor.

At iGroove, you have the additional benefit of being able to request an advance payment, just like you can at a major label – but again, without being forced to make a long-term commitment.

Additionally, you can request advances for older releases, for which major labels often apply a flatrate that is much too low a compensation. Furthermore, at iGroove you can get a reliable projection of your future revenues. This gives you the ability to plan your next steps and make better business decisions as an artist.

Conclusion

Many young musicians dream of a major deal. But more and more established artists who are already surrounded by a good team have realized that without a major label, they will not only become more independent but can also increase their revenues. There seems to be no better time than now to remain independent. If you have an offer on the table from a major company, you should definitely check first whether you can’t get a better deal elsewhere.