Music promotion on TikTok – that’s how it works!

After we recently analyzed how much you earn per stream on Spotify, we’ve now looked at its biggest competitor: Apple Music.

Once again, we have collected a large amount of data based on the streaming numbers of the iGroove customers. Similar to Spotify there’s not a single amount per stream but various. The difference between the different countries are big although the gap is not as wide as on Spotify.

What causes the fluctuations in streaming payouts?

A big difference between the two giants is certainly that Apple Music doesn’t offer a free service. Exceptions are free trial months and special offers. With these, the PPS (Pay Per Stream) is much lower than with regular subscriptions and sometimes there’s no payout to the artists at all. If these trial months and offers were excluded, the PPS at Apple Music would be even higher.

At Apple Music, the differences are mainly due to the cost of the subscription. While in Turkey you can listen to Apple Music for the equivalent of 1.90 USD for one month, in Denmark you pay almost 16 USD.

In addition, the PPS differs enormously among the various subscription types. Streams from a normal subscription in Germany generate 9,780 USD per million streams. With a family subscription it’s only 5,025 USD. As mentioned, the payments are even lower in the test months or for special promotions.

Since fewer factors influence the PPS at Apple Music, the differences between countries are not quite as massive. The front-runner Norway surpasses the other countries by a maximum of six times, with the exceptions of Nigeria, Kazakhstan, India and Russia.

Let’s compare the 20 most important music markets according to IFPI (South Korea, Brazil and Argentina are missing on the list). You can already see the massive differences between the countries. While in India you get 2,303 USD for one million streams, in Norway, Denmark and Sweden it’s more than 12,000 USD. In the 17 most important music markets, one receives an average of 8,924 USD for one million streams.

The major music markets in comparison

How much does Apple Music pay per stream?

Like Spotify, Apple Music keeps 30% of the revenues for itself and pays out a share of the remaining 70% to the authors. The remaining amount goes to the rights holders via label or distribution.

Apple Music pays the artists according to a so-called pro-rata system. This means that all generated revenues are put into one pot (or into many pots depending on the country and subscription model) and then divided on a percentage basis according to the streams generated. If Apple Music has made 100 million in one month and you have generated 1% of all streams, you will get 1 million.

Assuming that one would have the same number of streams in each of the 50 countries evaluated, one would receive 6,872 USD for one million streams. This is just a little less of the amount Apple Music pays for streams from Germany (7,002 USD). As with Spotify, there are significant differences between the English-speaking countries: In the UK you get over 11,500 USD for one million streams, in New Zealand 9,239, in Australia 8,259, in Canada 5,438 and in the USA 7,640. Which means that you get 1,5 times as much in the UK than in the US.

In terms of PPS and population size the most interesting markets are the UK, Germany, France, Japan, Australia and the USA. Unlike Spotify, Italy, Portugal and Spain are also very interesting. One should also not despise the Benelux countries, Switzerland, Austria and especially the Scandinavian countries, which top the list.

Apple Music vs. Spotify

It is no secret that Apple Music pays significantly more per stream than its Swedish competitor. Thanks to our evaluation you can now see how big the difference really is.

Calculated on average for all countries, Apple Music pays 2.88 times as much per stream as Spotify. While the factor in the home market USA is 2.16, it’s almost 5 in southern European countries such as Greece. In Portugal even at an incredible 5.77.

In the list below you can see how much you get for one million streams in 50 different countries. You can also compare the numbers from Apple Music directly with those from Spotify. The factor shows how much more you get per stream at Apple Music. Finally, you can see how much the subscription costs for the two stores in the respective country.

Legend: For streams from Germany you get 7,002 USD for one million streams at Apple Music and 3,367 USD at Spotify. Per stream you get 2,08 times as much at Apple Music. If an artist generates practically only streams from Germany, he needs about 1.18 million Spotify streams to earn 4,000 USD per month, while 571,000 streams are already sufficient for Apple Music. 

For the consumer it hardly matters which service he chooses, as the subscription prices are roughly identical. As a musician, however, you benefit much more from Apple Music.

Streaming payout per country

In the past, it was quite easy to calculate how much you earn from a sale. It was pretty clear how much you get per sold CD or vinyl record you sold and also with the downloads it was predictable what you earn per song. But in the streaming age the whole story has become much more complicated. Even though there are various figures on the web about how much Spotify pays per stream, there is no such thing as one fixed amount.

Therefore it’ s not surprising that we receive many questions from artists, why there are fluctuations in their streaming revenues. We have collected and analyzed a huge amount of data to give you a detailed insight into how Spotify pays you. Important: we only analyzed the numbers of Spotify. The other streaming providers work with different calculation models.

As mentioned, there is not one single amount Spotify pays per stream, but countless different ones. This depends on many factors, but mainly on which country the stream comes from and whether the listener has a free or premium subscription.

If we compare 18 of the world’s 20 most important music markets according to IFPI (China and South Korea are not on the list because Spotify is not available there), we see that the values vary enormously. The payout for one million streams ranges from 850 USD in Argentina to 5,479 USD in Norway. On average, you get 3,222 USD for one million streams in the 18 most important music markets.

What causes the fluctuations in streaming payouts?

One of the most important factors is the subscription price. In India, for example, a Spotify Premium subscription costs only a fraction of what you pay in Denmark. While a premium subscription in Denmark costs the equivalent of 15.65 USD, a premium user in India only has to pay 1.60 USD per month.

Also, the advertising revenues vary between markets and of course they also vary from month to month in each individual market. At the same time, the number of premium subscriptions and the number of streams generated by the listeners changes every month. In short, the numbers are in constant change and so is the payout to the artists.

This means that it doesn’t only depend on the changes in your personal streaming numbers, but also how the “market” changes in general. If the number of your streams decreases but also the total number of all streams drops equally, you still earn the same amount. Overstated, you earn the same amount for 5,000 streams at a PPS (Pay Per Stream) of 0.001 as for a single stream at a PPS of 5 USD. It’ also possible that you generate more streams, but the PPS decreases and you still don’t earn more.

Here are the most important factors that influence how much you get per stream:

• Subscription price
• Subscription type (Free / Paid)
• Origin of the stream (country)
• Advertising revenue generated in the respective market
• Number of subscriptions
• Number of streams generated per month

How much does Spotify pay per stream?

Spotify keeps 30% of all revenues generated. Of the remaining 70%, a part is paid for the songwriters and composers and the rest goes via label or distribution to the rights holders of the song.

From the remaining share it’s calculated how many streams there were in total and how high the share of each artist is. Assuming there were one million streams per month and you have achieved 1,000 streams, you will receive 0.01%.

So far, so good. But it’ s not that there is only one cake, there are dozens of them. So there’s one cake for every market, every subscription level, and so on. This is where the (big) differences start.

We have analyzed our extensive data material and calculated how much you earn per stream in the different countries where Spotify is available. Not yet included are the Balkans, as Spotify was only recently launched there.

In the table (at the bottom of the blog) you can see for 79 different countries how much is paid per stream and extrapolated to one million streams. As already mentioned, there can always be fluctuations, but these figures give you a good guideline.

You can see, for example, that for one million streams in Iceland you get almost nine times what is paid for the same number of streams in Morocco, Tunisia or Algeria. Assuming you had the same number of streams in each of the 79 countries, this would give you a PPS of 0.00203111. So for one million streams you would get 2,389.58 USD, which is about the same as in Uruguay or Spain. Many European countries such as Italy, Greece, Portugal, the Czech Republic, Hungary or Poland are below this average, in some cases even significantly.

But even in the English-speaking countries the figures vary considerably. While you get 4,912 USD per million streams in the UK or even 4,977 USD in New Zealand, the figure is 3,964 USD in Australia, only about 3,525 USD in the USA and even only 2,738 USD in Canada.

Summary

The evaluation clearly shows that it’ s not only important how many streams you generate, but also in which countries. For example, Iceland is by far the country with the best payoff, but with its less than 400,000 inhabitants the island state is still only moderately interesting. Countries with a large population like India or Mexico are of course attractive because of their size, but you have to generate multiple times as many streams as for example in the UK. If you consider not only the payout per stream but also the number of inhabitants, the most interesting markets are the UK, Australia, Japan, USA, Germany and France. This is no surprise, but our analysis also shows that the Scandinavian markets should not be forgotten and countries such as the Netherlands, New Zealand, Switzerland and Austria should not be ignored. On the other hand, if you have your core audience in Turkey, the North African states or even the Latin American countries, you have to make a double or triple effort.

Streaming payout per country

Advances have always been an integral part of the music business. When you think of this topic you usually consider advances for future releases. However, it is also possible to make money from your old releases – the so-called backlog. Thanks to iGroove’s world’s first artificial intelligence-based advance calculator , you’ll know the value of your backlog in a flash.

Why is the market value of my old releases interesting?

There are several reasons for it.

• Are you currently in negotiations with a label, distribution or management? Thanks to our calculation, you can present them with concrete figures and thus put yourself in a better negotiating position, especially if you are negotiating a deal that includes the backlog.
• Find out if the deals you made in the past were fair or if you need to negotiate better in the future.
• If you’re interested in joining iGroove or are an existing customer, you can quickly and easily request an advance payment.

How do I find out the market value of my releases?

You fill out this form (this is also possible if you are not an iGroove customer) and then our servers start calculating. Within 24 hours you will receive a detailed evaluation and a non-binding advance offer. The minimum amount for an advance is currently 2.000 Euro.

Can I freely choose the duration and commission?

Yes, you can change the offer as you like. Depending on your wishes, you can choose a term between one and five years. In addition, there is a range between 14 – 25% for the commission. Depending on the settings of the two sliders, the calculated advance amount will also change automatically, so you can find the ideal offer for you.

Once you have found the perfect offer, you can either print it out to start negotiations or have iGroove pay out the amount directly.

How long does it take to receive my advance payment?

As with the calculation of the advance, it’s important to us that everything is done as simply, transparently and without a lot of paperwork as possible. As soon as you have accepted the offer, a contract will be drawn up and digitally signed (legally binding). This saves a lot of time. If you’re not an iGroove customer yet, all you have to do is transfer your releases to iGroove and you’ll have the money on your account.

How do I transfer my releases to iGroove?

On the one hand, you need to request a takedown of your releases from your previous distributor, on the other hand, the releases need to be re-entered into the iGroove system. The most important thing is that you capture the same ISRC as you did with your old distributor. This also guarantees that all your streams and playlist placements are preserved. You can find more information here.  

By the way, the one-time release fees for your releases are on the house. So your release will be delivered to the shops for free and will stay there as long as you want it without any recurring costs.

Where can I see how much of the advance I have already recouped?

In your iGroove account, your advance contract is stored and you can always see how much of the advance has already been recouped. Every month you can see the latest payback based on your sales and you can see exactly how much you have recouped with which release. So you always have an overview of the outstanding amount. As soon as the advance payment has been recouped in full, you will receive your entire income paid out again minus the agreed commission. For example, if you set the commission to 20%, you will receive 80% of your earnings from now on.

If the advance is not fully recouped, iGroove bears the economic risk. Open amounts do not have to be paid by the artist.

Try the advance calculator now

Take a look at the interactive example of an offer now and request your non-binding advance offer yourself here.

Do you have any questions about our market value calculator or the advances?

Then contact our support at support@igroovemusic.com or write us in the chat.

If you make your music available on streaming platforms such as Spotify, Apple Music, Deezer or Tidal, you naturally have the goal of achieving as many streams as possible. It is even more annoying if your release is no longer available after a short time. The focus on numbers in today’s music world tempts many to use unfair methods. But if you fall back on dubious offers, you have to reckon with the fact that your release is suddenly no longer available.

There has always been fraud in the music industry: managers bribed radios to play their artists’ songs or labels bought their own CDs to boost sales. The new technologies lead to an unprecedented number of scams. We don’t want to go into all the possibilities of manipulation in order not to bring anybody on stupid ideas. Since it may not be quite clear to some what is actually allowed and what is not, we would still like to point out the most common methods here.

Fake Streams: Hands off Playola

A simple Google search shows that there are innumerable offers on the net that should help you to increase your numbers by buying streams. Even if the websites and offers seem serious at first glance, unfortunately there are very few of them. A simple basic rule is: If an offer is so good that it can almost not be true, it is probably not true either. We have looked at numerous offers and compared them. For example, you get 10’000 streams for 19.90 Euro, most of them cost about 35 Euro. But also offers where 10’000 streams are offered for about 100 Euro are not more serious – you simply pay more for the risk of being blocked.

Many Websites offer also that you can buy streams in specific countries or exclusively Premium Streams. That sounds naturally even more tempting, also because many offerers place very good-sounding reviews of content customers on their Website. But also here the chance is very high that you are dealing with click farms or other improper methods.

Apart from the risk that the song will be removed from the platforms again, buying plays doesn’t make much sense:

Let’s say somebody wants to buy 100’000 Spotify streams, which according to the provider come exclusively from Germany. The prices for such offers vary, but you would have to reckon with about 300 Euro.

For these 100’000 streams you will receive a maximum of 300 Euro from your distributor. Financially it is therefore a a zero-sum game but with the risk of being blocked by Spotify. And don’t forget that you don’t make a long-term profit because you only increase your streams at short notice but you don’t win a real fan who will listen to the next releases and support you.

The same applies of course to the purchase of followers, streams on playlists and similar offers. Hands off!

Abnormal streaming behaviour: The release will be blocked

Spotify and its partners are known to have excellent algorithms that suggest the right music to their users. Their algorithms are just as good at detecting possible fraud. If an artist tries to increase his streams artificially, the streaming services will sooner or later find out. They don’t care if the artist has fallen for a serious offer. Spotify, for example, pays the artists according to the following principle: They take the revenue generated by subscriptions and advertising and distribute it to the various artists on the basis of the streams generated. So if someone manipulates his streaming numbers by means of a bot that always plays a song for 31 seconds (from 30 seconds on it is considered a stream), other artists earn less and in fact we can speak of theft.

When analyzing the data, streaming services shall consider the following factors:

• Number of streams of a release per week
• Number of users who streamed the release
• Total number of streams / total number of users that stream the track
• Number of tracks on the release
• Number of short tracks on the release (< 60 seconds)
• Number of short streams on the release (< 60 seconds)
• Territorial activity

If one of these factors appears suspicious, the release will be blocked on the platform and the streams identified as fake will not be paid out. If the song is distributed through iGroove, we will receive a notification from the shop, whereupon we will contact the affected artist.

In most cases, we also recognize that the streaming numbers are suspicious. For example, if a German rap song generated most of its streams in the Philippines, or almost all streams were generated from free accounts or desktop devices, it is obvious that there was helped out. It is also important to note that we have no control over whether the streaming services block songs or delete illegally generated streams. The shops have the right to remove releases without warning if there is a suspicion of fraud. iGroove has no influence on this. Neither do we have any interest in music being removed, because we only earn money if it is available. Furthermore, we reserve the right to block artists who manipulate.

In rare cases, the algorithms may sound the alarm without fraud. For example, if a special promotion has caused a lot of streams in one go or a band with only a few followers suddenly has a lot of streams on one song (e.g. if their track is played in an advertisement). In such cases, however, you can also clearly tell the streaming services why the streaming numbers deviate from the norm and the song will be replayed.

In all other cases the song won’t be available and with regular cheating you risk to be banned from the platform completely. By trying to increase the income at short notice, you’ll only damages your whole career.

What kind of streaming and playlist promotions are allowed?

The rules of the streaming providers are very strict and so you could say: practically nothing. As already mentioned above, you should keep your fingers off offers that promise a fixed number of streams (especially at low prices).

Other offers are in a grey area. So it is officially not allowed to sell placements in playlists, but since this is offered by countless providers, Spotify and their partners seem to tolerate this to a large extent.

This is mainly due to the fact that bots are often used when selling a fixed number of streams and therefore no real people consume the music. Especially these bots are recognized and prevented by the algorithms.

If you buy a placement in a playlist which is then streamed by real listeners, the algorithms do not react.

iGroove offers its customers streaming promotions in cooperation with reputable partners. You can choose between different packages for playlist placements, which are divided into different genres. We offer various offers in the German-speaking area, as well as an international promotion.

You can also book offers like Playlist Push or Submithub. Simply said, you don’t pay the curators to be included in a playlist, but for their feedback. Of course, the curators also include the song in their playlist if they like it. 

Do you have an offer that makes a serious impression on you, but you’re still not sure? Then contact the iGroove-Support and get our opinion.

No songs in a permanent loop

Another popular but forbidden method is listening in a permanent loop. Of course it happens that you hear a song (even your own) four, five or 10 times in a row. It’s no problem either. Do you listen to a song for one or more days in a continuous loop? This might happen in torture prisons but certainly not with normal music consumers. The algorithms of the streaming service see this the same way and therefore a song is blocked if it is taken in permanent rotation. So you should neither listen to your own song in continuous loop nor encourage your fans to do so. This is very easy for the algorithms to recognize and the song is therefore soon no longer available and you do not see the money.

Besides obvious attempts to cheat, there are other reasons why songs can be removed from streaming platforms:

No release without all rights to the music

If you want to publish a song on the streaming platforms, one of the basic requirements is that you own all the rights to the lyrics and music.

Especially in the rap area there are sometimes problems. Here are some examples:

• A rapper has recorded a track about the beat of the latest Travis Scott single and wants to share it with his fans. He is welcome to do it, but not via the official streaming and download shops. If you don’t have the rights to the music, you have to use other channels and make the song available to your fans as a free download, for example..

• If rappers buy beats on the Internet, the terms of use must be read carefully. At best, you don’t have the right to publish them on all platforms with the acquired rights.

• Occasionally it comes also with features to problems, since the publication was not discussed with these. A concrete example: we had the release of a single on iGroove, on which a number 1 rapper was a guest. As soon as this was available, the manager of the rapper intervened with the major, where he is signed. They immediately made sure that the song was taken off the platforms again. Especially with celebrity feature guests, it’s important to coordinate the release exactly.

Cover songs are an exception. You don’t have the rights to them, but it’s allowed to publish covers. However, they must be marked as covers when they are entered in the iGroove system and the authors of the original song must also be entered in the Composer and Text Author fields. This only applies if both melody and lyrics correspond exactly to the original. If you record a German version of a Beatles song, this is not considered a cover.

Faulty cover

Another reason for a takedown could be the cover of the release. You can find out what you have to look out for in the artwork in this blog post.

iGroove checks every release manually and therefore no releases with faulty covers will be delivered.

Do you have any questions about the streaming promotion?

Then contact our support at support@igroovemusic.com or write us in the chat.

Streaming will undoubtedly continue to dominate the music market in 2019 and continue its steep rise (whether it will be equally steep remains open).

Since streaming is becoming more and more important, the relevance of playlists is of course also increasing. They are said to have replaced everything possible from radio to music journalism. This discussion can be held elsewhere, but what is certain is that playlists have become an integral part of the everyday life of musicians and especially of consumers.

So let’s take a closer look at the topic again and how playlisting works:

Curated playlists

On the subject of curated playlists, we have already dealt with here in detail.

The most important thing here is that you don’t just go for the playlists created by the streaming services themselves (which of course are the biggest, but also difficult to crack), but also pitch user-generated playlists.

Algorithm Playlists

Besides the countless curated playlists there are also playlists compiled by algorithms whose importance should not be underestimated. These playlists make sure that your fans won’t miss your new release and introduce your music to new potential fans, media or even labels. Last but not least, the algorithm-based playlists even provide more streams than the curated playlists. The Release Radar alone is said to generate more streams than any of Spotify’s curated playlists.

What do the algorithms pay attention to?

Of course, the algorithm does not care about the quality of the music. It only sees the numbers: How many people streamed the song, how many times it was saved, how often it was added to playlists and how many followers the artist has. These are some of the factors that play a role (how exactly the algorithms work is not disclosed by the streaming services).

What exactly are algorithm playlists?

As an example we take three playlists, which at least every Spotify user should know:

Discover Weekly

Every Monday, Spotify provides each user with a customized list of songs. The selection is based on the songs heard (or skipped) and the songs listened to by listeners with similar musical tastes. When an artist appears in this list, the main hope is that the listener will save the songs.

Release Radar

Every Friday the Release Radar offers up to two hours of new music compiled by the algorithm. In contrast to the mix of the week, the focus here is less on discovering new artists and more on the new releases of the week. Here the listener finds the new releases of the artists he follows or has heard in the past, mixed with some recommendations. So from an artist’s point of view it is important that as many people as possible follow you, because then the new release will show up in the release radar.

Mixtape

The mixtape is mainly based on genres and again on what the listener has heard in the past. If a listener has a very differentiated taste in music, Spotify can present up to six different mixtapes. The more regularly the user listens to this mix, the more often it is updated. So from a musician’s point of view it is important to establish oneself in his genre. Of course, the chance of landing in a mixtape in niche genres is higher than if you make pop music.

So music becomes pure data which the algorithm uses to calculate, and at least if you listen to a lot of music (and thus provide a lot of data), this works frighteningly well. As a musician, the goal must therefore be to feed the data monster with a lot of input as well.

How can I influence the algorithm?

The times where you release an album every 2 or 3 years and have no musical output in between are over. You don’t have to shoot out new singles every week, but a regular output certainly helps to keep the data machine happy.

Of course, even the biggest ouput is useless if the songs are not heard. So you have to build up a fanbase and then make sure that the fanbase stays active on the streaming services. The algorithms react, as already mentioned, to how often a song is saved to the library, liked or added to playlists.

It is therefore important to use its channels to encourage the fan community not only to listen to the songs, but also to save and share them. For this reason it is essential to always spread the streaming links via social media.

Especially you should encourage the fans to follow you (more on this below). The more followers you have, the more people learn about a new release and therefore there are more streams, saves and likes.

The algorithm always notices when your song is added to a playlist, whether it has millions of followers or just a few. The more playlists your song has been added to, the greater the chance to get into one of the algorithm playlists. It’s not only the size of the playlist that counts, but much more how well your song performs in the playlist. So if your song is in a large playlist but doesn’t fit in there and is therefore often skipped, it’s less useful than if it’s in a small playlist but fits perfectly there and is therefore heard.

As mentioned above: try to get into as many relevant playlists as possible and don’t focus only on the big playlists. Sometimes the playlist with a few hundred followers helps if your song is really heard there. So it’s also worth asking your own fans to add your song to their playlists. To underline this with a number: 20% of all streams generated on Spotify come from playlists, no matter if big or small.

If you pitch your song at least one week before the release, it will automatically be shown to your followers in the Release Radar. So don’t be late!

Do not expect miracles: it takes time to appear on the radar (pun intended) of the algorithm. But if you follow the above tips and implement them consistently, it will pay off eventually. You don’t have to generate millions of streams to do so, the threshold for “Your Mix of the Week” is supposed to be at 20,000 streams.

Personalized Editorial Playlists

Recently Spotify started testing so-called “Personalized Editorial Playlists”. These are a mixture of curated and algorithmic playlists and therefore, like the algorithm playlists, unique for each user. In concrete terms, this means that Spotify’s editorial team creates the playlist and the algorithm then adds songs for each user based on their listening behavior.

This is of course a great thing for the listeners, but how can an artist be sure that his song, when added to the playlist, will be shown to every fan? Spotify has found a pretty elegant solution:

In Spotify for Artists you can already see to which playlists a song has been added. The personalized playlists are now marked with a blue button (“Personalized”).

Every artist can now find a personalized link to this playlist, which he can share. This link appears 7 days from the moment the song is added to the playlist.

If a fan clicks on this link, your song will appear at the top of the playlist. As soon as the link is clicked, the song will be shown at the first position for 24 hours, after that it will slide to its actual position or disappear completely from the playlist.

Why playlists are important but not everything

There are artists who have broken the million mark in terms of monthly listeners, but only have around 1000 followers. The case is clear: the streams here come largely from playlist placements.

On the other hand, there are artists who have millions of streams, tens of thousands of followers and yet are never found in a big playlist. Again, the case is clear: the streams come from the loyal fanbase they have built up.

Which shows us that playlists are a short-term affair. If you are in a popular playlist, this is quickly shown by the monthly listeners who, depending on the playlist, literally skyrocket. However, it often goes in the opposite direction as soon as the song is no longer in the playlist.

It is extremely difficult to gain fans through playlists, because people listen to the playlist because it suits their taste, but often they don’t really care who actually made the songs. So it can happen that you make thousands of Euros for a few months just because of Spotify playlists and when you are out of the playlist you have exaggeratedly said again only the tip you had before the playlist placement.

So it’s relatively simple: by placement in large playlists you can generate many streams and earn good money, at least in the short term. But in the long run, a high number of followers is much more important than the volatile number of monthly listeners. One million monthly listeners or one million streams unfortunately does not mean one million fans.

Of course you still have to try to place your songs in the playlists, one doesn’t exclude the other. But you shouldn’t invest all your energy in playlists, because you have to be aware that every label, every distributor, every artist and your mother also tries to get their songs into the playlists. So the competition is huge.

What is a reasonable ratio between followers and monthly listeners?

Roughly speaking, the followers should be about 5% of the monthly listeners – or even better, more. So if you have a million monthly listeners, your followers shouldn’t be bogged down in the low thousand range, but certainly 50’000 or more.

You can make quite a science out of the analysis of streaming and follower numbers, as this article by Sam Chennault (Chartmetric) shows, who analyzes the impact of playlist placements on follower numbers and also what influence the media presence of the artist has.

In the end, it can be summed up quite simply: You need both streams and playlist placements to generate sales, but above all you need followers to make your income sustainable. These fans are the ones who come to your concerts and buy your merchandise.

Streaming outshines CDs and downloads

If anyone still doubts that streaming has long since overtaken the other forms of music consumption, there are some figures from 2018 to round off the story.

Worldwide, streaming now accounts for 46.8% of the music market’s revenues, significantly outpacing physical sales (25%) and especially downloads (12%). Of the 19.1 billion that were generated worldwide, a whopping 8.9 billion are thus attributable to streaming.

Germany is known as a late bloomer in terms of streaming and indeed almost half of the turnover is still generated with physical products (mainly CDs with 36.4%), but even here streaming is already responsible for 46.4% of the turnover. Completely irrelevant is the digital download which with 7.8% is only slightly ahead of vinyl (4.4%).

In Switzerland, streaming already contributes a substantial 58% to the music industry’s rising profits, while physical sales (24%) and downloads (18%) are steadily declining.

Also in Austria, streaming has overtaken the CD and is now at 51.6%, while the CD is holding its own at 43.6%. Here too, downloads (10.9%) are only just ahead of vinyl (7.8%).

Do you have any questions about playlists?

Then contact our support at support@igroovemusic.com or write us in the chat.

The word advance is a common phrase in the music world and sometimes horrendous sums are passed around. Many musicians dream of a deal with a big advance – but is this really the hoped-for opportunity or is it more of a risk for the artist? We want to investigate these questions a bit more closely here.

Probably the most important and supposedly most logical thing first: an advance is not a gift. Labels don’t make gifts – why should they? As the name suggests, the money is only advanced and you could simply call it a loan. So be aware: every cent you get as an advance has to be paid back or brought in again under normal circumstances.

Are there any advances these days?

Short answer: Yes
Longer answer: Yes but they have become rarer and lower. The reason is relatively simple: The labels, especially the smaller ones, simply don’t have as much money available as they used to. Another reason is the production costs, which have become considerably cheaper, especially in the field of electronic music. In addition, it has also become more difficult for the labels to forecast sales in the streaming age. However, as streaming becomes more and more the norm, this is likely to change in the foreseeable future and may also have a positive impact on the level of advances. We can already observe a trend that major labels in particular are once again offering large advances for distribution deals more quickly. By the way, advances are not only granted by labels, but also by distributors.

What does it depend on if I get an advance?

A label will only sign an artist if it expects to earn money with him. They will calculate how much they have to spend on marketing and promotion and how much they think they can earn with your release. Based on these figures, a label will calculate if there is an advance and how much it will be. Despite these calculations, labels can make mistakes and as an insider told us, it happens more often than you would think that a release doesn’t recoup its costs. What this means for the artist, you can find out below.

What is the approximate amount of the advance?

It is almost impossible to give concrete figures, as there are many factors involved. This starts with the financial possibilities of your label or distribution, also depends on the type of contract and last but not least of course on your popularity, your previous sales and of course also a little bit of your negotiating skills. Roughly speaking, this begins with amounts in the low four-figure range and can also be in the six to seven-figure range for the top acts in the German-speaking world.

Why it is sometimes better to take a smaller advance or not to take it at all

Especially smaller labels don’t have enough money left for the promotion that would benefit your release after paying a big advance. So if you are offered a large advance, make sure that this is not at the expense of marketing and promotion. So sometimes it’s better if you don’t get an advance, but the label invests in you otherwise. It is important to think long term and not just to see the fast money. You should also always calculate whether it’s really worth signing with a label – whether you get an advance or not – or whether you’re not better advised as an independent artist. Large advances can also tempt you to spend your money faster or take more risks. For many artists, it feels like they don’t spend their own money, but at the end of the day they do. As I said, advances are not gifts!

When will I receive my advance payment?

If a label or distributor has decided to give you an advance, this is comparable to a loan. This is usually not paid all at once, but in tranches. For example 50% when signing the contract and 50% when the demos of the songs are finished and the studio work is coming up. If it’s a large amount, it can also be paid out in three or even more tranches.

A distinction must be made between two different types of advance:

• Production cost grants: As the name suggests, these are earmarked and serve to pay for the costs of production (studio, mix, mastering etc.). Here it is recommended to keep the receipts so that you can show them and prove the expenses.

• Advances on royalty payments: In most cases, the label is not telling you what the advances are used for and the money is therefore not earmarked.

What should I use my advance for?

The question should probably rather be what it should not be used for. Probably the least reasonable thing you can do with the money is to buy a big car or other consumer goods that have no connection to your music career. A large advance can of course be used to cover your living expenses and to pay the rent, so that you can fully dedicate yourself to music. The advance payment is intended primarily to cover studio costs, shoot videos or pay fellow musicians. But a healthy sense of proportion is also important. Just because the label or the distributor has advanced you the money, you don’t have to shoot a completely oversized video or rent the most expensive studio, which you actually wouldn’t need.

How do I pay back my advance?

Once your release is out, you will receive regular settlements from your label or distributor. There you will see your earnings, but with the remark that you will not get them paid out because the advance payment has to be recouped first. So you will only see some of the income of your release once the advance payment has been refunded. According to figures from IFPI, an advance used to be reimbursed within 18 months on average. Again, streaming has changed a lot and now it takes even longer than those one and a half years in most cases. So you have to be prepared for a long period of time without, or rather with significantly lower revenues.

This is especially true because cross-collateralizing has become the standard these days. In simple terms, this means that the advance payment is recouped with all the income the label participates in. So it’s possible that your advance is recouped with publishing rights, concert fees or merchandise (but usually not all of it). Two owners of an independent label explain this as follows: “In the meantime, the market has changed in such a way that it is hardly worthwhile to plan only according to the income from sales and streams. A contemporary artist is also much more comprehensive than the amount of his sales. We believe that sales no longer need to be the main point of revenue, but rather interact with live performances, merchandising and sponsorship.”

What many artists are also unaware of is that the advance payment is not recouped with the total income, but only through the artist’s share. Let’s assume that you have negotiated a 50:50 deal with a label and received an advance of 10.000 Euro. Until you have recouped the advance, you have to generate 20.000 sales to be able to refund the 10.000. So the lower your share of the revenue, the longer it will take until you have recouped the advance.

As an artist you should try to get a deal where only the income of the music is recouped. This way you don’t earn anything on sales and streams for a while, but at least money still flows regularly through concerts, merch etc.. However, such a deal without cross-collateralizing is anything but easy to negotiate, at least for artist contracts where the label bears practically the entire risk. The situation is often different with master recording agreement or distribution deals.

Here is a brief explanation of the three most common types of contract:

Master recording agreement: In this case the artist delivers the finished production (the master tape, therefore the name) to the label. With the master recording agreement, you transfer the rights to your product to the label for a pre-defined period of time and for clearly defined territories. In return you receive either a flat-rate amount, a share of the sales or a mixture of both. Often there is an option for one or more further releases. Who is responsible for further costs such as promotion and marketing is regulated separately.

Distribution agreement: This is usually signed over one album only, sometimes with the option of one or two additional albums. This often also without exclusive binding. These are concluded either with a distribution or a label. It is similar to the master recording agreement but with considerably less rights and obligations for the label / distributor. Therefore the artist share is by far the highest.

Artist’s agreement: This is where the closest bond between label and artist exists. Usually the label pays most of the costs of a release (incl. marketing and promotion) and thus also bears the financial risk. Accordingly, the artist’s share of the revenues is also lower than in the case of a master recording agreement.

In practice, there are more and more hybrid forms of these three types of contract. Especially because these three contracts are so different, it is not possible to define clearly what a fair artist’s share is. In some cases it may be justified if the artist only receives 15% of the income because the label bears all the costs and the risk. But in other cases 15% is also pure rip-off. A lot of things are simply a matter of negotiation. A music lawyer stated it to iGroove as follows: “Due to the developments of the last few years, it is indeed the case today that record companies are also participating in further money flows. Whether this is fair or not must be judged on a case-by-case basis. For certain productions, the recording companies themselves take great risks, so that a participation in further revenues or offsetting against them is not necessarily unreasonable. One really has to keep the big picture in mind: Who contributes what services, who invests how much, how big are the revenues to be made?”

What you should not forget in your calculation: If you have signed with a label, you get a much smaller share of sales and streams than if you distribute your album yourself via an aggregator. Let’s take as an example a song that is sold via iTunes for 0.99 Euro. With iGroove, the artist receives 0.69 Euro in this case (iTunes takes just under 30%, iGroove 8%). Depending on the deal, you may have to give a significant amount of money and time to your label as they invest time and money in your career, marketing and promotion. So if you calculate how much you have to sell until you recouped an advance, you should not start from the numbers you generated as an independent artist.

What happens if the income is lower than the advance?

This is probably the most fundamental question and therefore it is important to negotiate well from the beginning. The standard is that an advance is non-refundable. That means, if you don’t reimburse the advance, the remaining amount doesn’t have to be paid, so the label bears the economic risk. Contracts where the advance has to be paid back under all circumstances and therefore the artist bears the whole risk are not recommended. As already mentioned above, there are quite a few releases that do not recover their production and marketing costs. So you have to be very careful!

Record contracts often run over several albums and often there is a clause in the contract with “minimum fund” and “maximum fund”. If an advance was not recouped with the first album, the “Minimum Fund” applies to the next album. That means: the advance will be smaller (or even 0). If the advance was recouped with the first album, the “Maximum Fund”, i.e. the negotiated maximum amount, applies. The amount of your advance on the first album and its success can have a significant impact on your next release.

In most cases the minus of the first album has to be recouped with the second album. For example, if you have signed a deal for an album with an option for a second one, the contract will already state that the second album will also be recouped. In addition, it is often already stipulated in the contract that the advance payment for the second album will be renegotiated after the option has been exercised. One label representative explained to iGroove that the uncertain market situation makes it impossible to fix advance payments far in advance.

Here is a calculation example:
Let’s assume that you have received 20,000 advance payments for your first album, but you have only recouped 10,000 of them. But the label still believes in you and redeems the option for a second album, but with a lower advance of 10.000. That means with the second album you have to recoupe 20.000 again (10k from the first album and 10k from the second).

At this point a short digression on the subject of options: The basic problem with options is, of course, that the further course of an artist’s career cannot be predicted. As a newcomer, one is usually in a rather weak negotiating position. So if a newcomer signs a contract for an album with the option for a second one and then goes through the roof with the first record, he is sitting on a contract whose conditions are worse than those of an established artist. So he will also earn on the follow-up productions at the conditions of the first album. However, most of the labels will probably be willing to talk to you and improve the conditions, for example in connection with an additional option. It is also worth mentioning that in the 80s and 90s contracts were still being signed for five or even seven albums. Today this happens at most in absolutely isolated cases. Current contracts are mostly for one album, with the option of one or two additional albums. If at all: sometimes it’s even only about singles, until an album becomes an option at all.

But if you haven’t recouped your first album, there is of course the risk that you are quickly left without a record deal again because the option is not taken.

Get professional advice!

Negotiations with a label or distributor involve many financial and legal details, so it is advisable to consult a professional (e.g. a lawyer specialising in music). There are several reasons for this: He will prevent you from being ripped off if you are offered a much too small advance or the conditions are generally bad. But he can also advise you if the advance payment is too high, but there is hardly any budget left for the promotion of the release besides the advance payment. In general, you have someone at your side who can read the numbers the label gives you (or asks for the numbers if they don’t) and can advise you accordingly. He will help you to put the contracts, which are often written in legalese that is incomprehensible to ordinary people, into a comprehensible form. So have these contracts checked, because as an artist you often commit yourself for several years, so there are long-term consequences if you sign a bad deal!

It is also advisable to get support for the tax and social security situation, for example through a trustee. If you ignore these issues for a long time and muddle through somehow, you will be in for a nasty surprise at some point. It is therefore better to seek competent advice from the very beginning.

Advances from iGroove

As mentioned above, not only record companies but also distributors grant advances. So does iGroove. Our goal is to make the process as transparent as possible and offer fair conditions to the artists. As soon as the advance is recouped, 82% go to artists and 18% remain with the distributor. Furthermore, there is no fixed contract period – the contract can be terminated at any time as soon as the advance payment is recouped or after a maximum of two years. This means that an artist can also buy out of the current contract at any time, should he or she receive a better offer. He then simply has to pay the remaining amount of the advance.

You can easily request an advance in your iGroove account.

Conclusion

Of course it sounds good if you have the possibility to get a nice amount of money for your release and in many cases of course it is. But it’s important not to be blinded by the ” fast money” and to check the offer carefully and consider if it’s really beneficial for your own career, especially in the long run. As already explained in detail, expert support is highly recommended.