According to a leaked royalty report, Dr. Dre’s headphones company Beats Electronics’ streaming music subsidiary Beats Music had around 111,000 subscribers by the end of March. Streaming music giant Spotify has over 24 million listener and over 6 million paying subscribers according to its official report. Beats Music stands in austere contrast to Spotify.
Beats Music launched in January 2014, while Spotify launched in October 2008. Beats Music generated a sizable subscriber base quickly than Spotify or any other streaming music company. This ability must be one of the reasons Apple’s interested in acquiring Beats for $3.2 billion.
There is no free, ad-supported tier in Beats Music which makes it difficult to tell the actual number of people who listen to and pay for music on the streaming music service. According to the leaked document, 49,371 individual accounts (each $10 per month) and 61,621 family accounts (each $15 per month) has been registered with the Beats Music since its launch. Up to five people will be accommodated in a family account.
As part of a promotion, the United States’ telecom giant AT&T has been offering three months of free Beats Music. Said that, most probably a decent portion of those subscribers have likely been using the service for free without paying so far.
The leaked royalty document revealed the figures paid for songwriters. Beats Music pays insignificant amount for songwriters per song played: $0.000126 per play.
David Lowery is the musician who posted the leaked royalty document to the Trichordist blog. He wrote in an email, “Traditionally performers and songwriters have been paid about equally.” “But with the advent of streaming and webcasting [accounting], the division flipped about 10-to-1 in favor of the performer.” “Generally divide the label rate by 10 and you end up with the songwriter rate.”
Spotify pays royalties between $0.006 and $0.0084 per song played on their streaming music service. The songwriters end up getting only a very thin slice of the sum.
Awful computation: With the Beats Music royalty rate, a songwriter will get $10 after his song played 80,000 times, and he can get an individual subscription of Beats ($10 per month). There may be pressure on Apple to raise artist compensation once/if the acquisition is complete.