Insights #006: Apple Music's Song Plays Gap: Implications for Music Royalties and Intellectual Property

In recent news, Apple Music, the streaming service owned by tech giant Apple, disclosed that it has never had a song accumulate one billion or more plays. The stands in stark contrast to Spotify, which has seen a rapid growth of tracks entering its prestigious “Billion Club”. The implications of this revelation are significant particularly in relation to music royalties and intellectual property in the music industry.??

Apple has historically opted to publish combined subscription data for all of its services rather than revealing the precise number of customers on its music streaming platform. Apple's client base is huge, as seen by the 975 million subscriptions company said it had as of April 1st across all of its services. The three months that ended on April 1st saw approximately $21 billion in revenue from the music category alone. According to J.P. Morgan analysts, Apple Music will likely have 110 million people with Apple Music subscriptions by 2025.?

Apple Music disclosed last week that their most played song, “Shape of You” by Ed Sheeran had almost 930 million listens. The song’s performance on Spotify much outperforms this with 3.5 billion streams to date. Similar to that, 5.90 billion people have watched the official music video on Youtube. The fact that all of Spotify’s top 100 songs have received more than one billion streams shows the services dominance in the field of music streaming.?

The disparity between Apple Music and Spotify's streaming numbers has significant implications for artists and their intellectual property rights, as well as music royalties. Spotify operates on a model that pools revenue and distributes it based on an artist's share of overall streams. With Spotify's vast user base, tracks can achieve streaming milestones faster than ever before, providing potential for higher royalties for artists. The relatively smaller user base of Apple Music, however, raises the possibility that artists may get reduced royalties from the service. Furthermore, unlike Spotify and other rivals, Apple Music does not provide an ad-supported tier, thus it only generates revenue from subscriptions. This limits the platform's ability to expand and its capacity to pay artists sizable royalties.

The revelation that Apple Music has yet to reach the milestone of one billion plays for a single song sheds light on the contrasting performances of Apple Music and Spotify. The numbers underscore Spotify's dominance in the music streaming industry and raise important questions regarding music royalties and intellectual property. Artists may face disparities in earnings between the two platforms, with Spotify's larger user base and faster-growing "billion club" offering potential for higher royalties. As the music industry continues to evolve, it will be crucial for platforms like Apple Music to address these challenges and adapt their strategies to support artists and their creative works.