The real price of a music stream? It just keeps going down and down…


MBW review-1Each week, The MBW Review gives our take on some of the biggest news stories of the previous seven days. This time, we react to the RIAA’s latest value figures for the US market – and the bad blood running between YouTube and the major labels. The MBW Review is supported by Believe Digital. (The views in these articles are those of the writer and are not necessarily endorsed by Believe.)

Brace yourself.

The average amount of cash generated by an on-demand music stream in the US last year fell by 24%.

Each play across official premium and ad-funded platforms in 2015 – including Spotify, YouTube, TIDAL, Apple Music and Google Play Music – generated an average of $0.0051 for recorded music rightsholders.

MBW has calculated the figure by contrasting the volume of music streams in the US last year (as measured by Nielsen) with the amount of cash these plays generated, as published by the RIAA.

This figure has fallen dramatically over the past three years, since Nielsen began breaking out specific streaming consumption figures.

In fact, 2015’s average per-stream payout was down by more than a third – 38% – on 2013’s $0.0081 figure.

And sorry to say it: there’s worse news to come.


Once again, these are stats only relating to on-demand services – not taking into account income or usage on non-interactive services which pay through to SoundExchange such as Pandora.

As such, they represent a streaming average across the platforms mentioned above, plus the likes of Rdio, Rhapsody, Xbox Music and more (some of these services have perished, while new platforms have launched).

So… why is this worrying decline in the per-stream value of music taking place?

The obvious but important answer: because on-demand consumption of music streams is rising much faster than income in the US.

This is what’s also known as the ‘value gap’; a running theme in the RIAA’s publication of its 2015 numbers this week.

And if we’re talking about the ‘value gap’, we need to talk about YouTube.

Unfortunately, there are differences between the RIAA (value) and Nielsen (consumption) data which means working out an accurate per-stream payout figure for YouTube alone is rendered impossible.

However, we can get close… and the result makes dire reading for the record business.

Nielsen provides an official annual figure for the total amount of US streams on video platforms (ie. YouTube and Vevo) over the past three years.

In 2015, this number jumped up to 172.4bn – over half of the total on-demand music streaming consumption in the US.


Meanwhile, the RIAA gives out a value figure purely for ad-supported platforms – across audio and video – including YouTube, SoundCloud and Spotify’s free tier.

In 2015, this figure stood at a controversially small $385.1m.

What that means: if we conflate these two pieces of data, we can work out a per-stream figure that flatters YouTube (and Vevo), because it encompasses all of the extra cash from ad-funded audio services such as Spotify, SoundCloud etc.

However, it also gives us a very telling indication of how much YouTube might be paying out vs. its consumption, and – perhaps even more importantly – the direction this value is moving in year-on-year.

Make sense?

Remember: this is an indicative per-stream figure for YouTube’s US payouts that’s definitely bigger than the reality.

And here it is:


As you can see, in 2015, this indicative figure stood at just $0.0022 per stream.

Once again, just to drive it home, the reality of what YouTube is paying out per stream in the US is certainly lower than this sum.

What’s worse: compared to the ad-funded/video figure we’ve calculated for 2013 ($0.0039), 2015’s number represents a scary decrease of 42%.

The introduction of premium service YouTube Red to the US at the end of 2015 finally gives YouTube the chance to up-sell consumers into a subscription model – and potentially boost these flagging per-stream figures for the music business.

We’ll be watching closely to see if it can stop the rot.

Because, right now, although the official total value of music streaming is booming, the price of each individual stream in the US is only moving one way.

Ondemandcash[Pictured: Wiz Khalifa, whose See You Again was the most-played music track/video on YouTube last year.]

The MBW Review is supported by BelievedigitalBelieve Digital, a leading independent digital distributor and services provider for artists & labels worldwide. Believe empowers artists and labels to maximize the value of their music with a full suite of services. Championing innovation and transparency throughout its ten-year history, Believe prides itself on providing tailor-made services for each label and artist. Visit for more details.Music Business Worldwide

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  • Thomas Silverman

    One should never really refer to streaming. Subscription music services and ad-supported services could not be more different. Subscription services generated an ARPU to the music industry of $62.00 last year. Ad-supported services generated around $3.50. That’s a factor of 18 times less than subscription. Subscription grew faster than any other sector in both subscribers and ARPU. Everyone is missing the point. By 2020, Subscription should be generating more than $3 billion to the U.S. music industry (at net wholesale, not retail). Whatever our industry needs to do to get US subscribers to 40 million, we need to do it NOW.

    • Tom

      I couldn’t agree more. There is so much misunderstanding. A platform such as Spotify generates so many different “royalty per stream” payouts, differing from month to month as well as the different access points and subscription/ad-supported plans of users. Creating mean, average or median values of a stream is fairly meaningless. The focus on increasing subscriber numbers, and increasing the ability of platforms, like Youtube and Spotify, to better serve advertisers is a far more useful discussion.