Over the past few weeks, album sales, or the lack thereof, have been hotly debated online amongst music fans. Today’s music climate revolves around streaming metrics. While artists such as Drake, Taylor Swift, and Bad Bunny pull in record-breaking numbers on each platform, they’re not being compensated in kind. For mid- and smaller acts, that pot shrinks significantly.
To aid recording artists in understanding their earnings, on Monday, October 30, Billboard added a royalty calculator for Spotify and Apple Music. Here’s how to calculate the royalties for streaming payouts.
The tool, developed by the legal and consulting firm Manatt, Phelps & Phillips, offers multiple calculations based on data gathered from direct source payers. Although the formulas are based on United States models, international artists are encouraged to use the software as a reference.
After considering four key points (total payout for the number of streams, sound recording payout, mechanical royalties, and performance royalties), the estimated total is provided in an itemized breakdown.
For example, the results of a Spotify search calculate several rates based on the servers’ paid tier, ad-supported tier, and other tiers. This is also the case with Apple Music. An example on the site compared the earnings from one million streams on both platforms. The song on Spotify brings in $3,700 for sound recording owners, $591 for mechanical royalties, $506 for performance royalties, and $2,279 remains with Spotify. On Apple Music, the payout is estimated at $7,085 for sound recording owners, $899 for mechanical royalties, $819 for performance royalties, and $2,551 given to Apple.
Billboard’s Spotify & Apple Music royalties calculator is available online. Find more information here.