How much streaming revenue you should really be making

Unless you've been living in a cave recently, you should be aware that a large debate has been raging about streaming revenues on the Internet and how much artists should actually be making from streaming. I've been busy looking at numbers available from various places on the internet in order to try and calculate an answer to that question for you.

The revenue calculations

There are two possible ways we can come up with an average. One is to look on a per artist basis, the other to look on a per stream basis. Either way, there are a number of figures we need to try and get hold of, which leads to the following questions.

1. How many internet users are there?
According to Internetworldstats, there were just under 2.5 billion internet users in June 2012. Obviously not all of them will listen to music via the internet, but as a starting point for calculations, let's assume they do.

2. How much music does the average person listen to in a day?
Not a particularly clear answer on this one as it depends on many factors such as where you live and whether you work. I've seen figures between 1 and 13hrs a day quoted. For the purposes of this experiment, I'm going to go towards the generous end of the spectrum and use a figure of 10 hrs a day as a starting point.

3. So how many tracks is that in a year?
If we assume a track is 5 minutes in length, in theory you'd be able to listen to 12 tracks an hour. In practice, thanks to things like news bulletins and advertising it probably makes more sense to drop this to 10 tracks in an hour. Using our figures from above this means a person can listen to 100 tracks in a day or around 36500 in a year.

4. How many artists are there?
Hard to say. The best figure I have comes from the current front page of last.fm which mentions tracks from 54 million artists. It would be pretty safe to say there are probably a lot more who aren't currently on the service.

5. How many available tracks are there?
Again, hard to say for the same kind of reasons as number of artists. Once again, I'm using the figure from last fm which states 640 million

6. How many listeners to an artist?
2.5 billion = 2500 million, so we can say that each of our 54 million artists should have around 46 listeners in an ideal world where every artist is created equal. The true figure is almost certainly less for the majority. "But people listen to more than one artist" you might say. Correct, but each of those artists would then only get a percentage of the revenue i.e. if one listener listens to 10 different artists equally, each artist effectively gets 1/10 of the listening hours and revenue that listener can provide.  We're just making the calculations simpler here.

7. So on an artist basis, how much revenue?
I'm going to use UK pounds here, but as UK streaming services are looking at charging around £10 a month, EU ones 10 euros a month and US ones $10 a month, you could probably just ignore the currency sign wherever I use it and consider the numbers in terms of whichever of the 3 currencies makes most sense to you.

46 listeners paying £10 a month = £460 a month in revenue. However this assumes that all of your 46 listeners can both afford to pay and are prepared to pay £10 a month, which is unlikely given they need to come from the total world population. Even if all 46 can afford it, you're still not going to see all of that £460 as some of it is going to get eaten up by sales taxes and the cut that the streaming service itself takes. Plus, if you have a label then they may well take a cut before you see any of that money. Assuming that about 25% of the money actually makes its way to you, this means the average artist would get a mere £115 a month

8. So on a track basis, how much revenue?
Just like the lottery, not all artists are created equal in terms of the number of tracks they have available, so in many ways this figure may make more sense than going from the number of artists themselves i.e. having more tracks gives you more chance at getting revenue.

We already know that our 2.5 billion people are going to listen to 36500 x 2.5 billion tracks in a year. That's a total of  91250000000000 plays. If each of our 2.5 billion people is paying £120 a year (£10 a month), that means those plays are generating £300000000000 which is roughly equivalent to £0.003 a play.

And if there are 460 million tracks, this means that on average each one will be played around 198,000 times a year or 16,500 a month. At £0.003 a play this means a track would generate less than £50 of revenue a month.

However, once again if we assume that only 25% of the revenue generated by plays actually reaches you the artist, that means each track is capable of generating you around £12 a month

What does this really mean?

On the one hand it's hardly great money, but on the other it doesn't sound like the streaming situation is quite as bad as many artists are making out.

But on the other, if you consider the questions again carefully, you should see that I have generally erred towards the generous side as far as you, the artist is concerned. If there were more artists or more tracks out there, you'd have more competition and hence less revenue. If people are actually listening to less hours of music than I've suggested, once again you'll have less revenue. If (as is likely) not all internet users listen to music on the internet in the first place, you'll have less revenue. In other words the figures of £115 (artist) and £12 (track) for an average artist are likely to be close to absolute best figures that streaming could provide.

But wait... it gets WORSE.

The most obvious point here is that the music industry as a whole is currently not worth anything like £300 billion a year (2.5 billion people paying £120 a year). Even if we consider all sources of revenue such as concerts, merchandising, advertising and sales of things like CDs and players, the best estimate I've seen is $168 billion. And currently streaming is only a small fraction of that - something like 10%. So if we base on 16.8 billion instead of 300 billion (and assume £=$ as per question 6 above), the average artist should currently be earning less than £6.50 a month (artist) or £0.70 a month (track) from streaming. Is it really any wonder that artists are worried about streaming revenues and the income they might receive if CD sales disappear?

Even if the whole of the $168 billion was to come from streaming in the future we've still got to more or less halve the absolute best figures I came up with earlier. Or to put it another way, current spending on all areas of music needs to both double and come from streaming alone if an artist is to see anything close to the absolute best figures I've quoted.

Also the internet is still fairly new in terms of the average age a human lives to. That means there are independent artists who died before the internet was around and it's likely their music isn't anywhere to be found on it as a result. In a world where every artist is created equal, that means you're up against not just your current peers but also every other artist whose music has either hit the internet in the past or will do so in the future. In other words we can expect the number of artists on the internet to go up. So thinking 5, 10 or more years down the line, your music will likely be up against the music from all the new artists that appeared in that time as well as new music from artists currently on there and most of/all the music currently on there.from artists who are already dead or who died in that time. If the competition goes up, your share of the music revenues goes down.

Of course this in turn raises some interesting questions with regard to both the present and the future of music licensing. We can already say with certainty that the 54 million artists contains artists from tens or even hundreds of years ago (think Bach, Mozart etc. for starters) so not all of the tracks out there are likely to be due revenue under current conditions. If independent artists say things should be on an equal footing, what should this really mean for the future in terms of how and when revenues should be paid to artists? Should revenues only be paid while an artist is alive? And what happens to the revenues generated by someone listening to a track by an artist who has died if so? Should there be a "lifetime" for a track in terms of revenues being paid for it or should it still count towards revenue calculations whether played now, or in 10/20/50/more years time? What would happen to revenues after a track's "lifetime" was up? i.e. if a listener was paying £10 a month but only ever listened to tracks whose "lifetime" was up, where would the money they paid go?  Just a few of the questions to be considered.

Some other statistics you might find interesting.
1. With 54 million artists available and the ability to listen to 36500 tracks a year  (based on the information above), it would take me nearly 1480 YEARS to listen to just one track (and then only once)  from each of the artists currently available. That's more than 15 lifetimes to listen to every artist currently out there if I listen for 10 hours a day every day of the year. If you wanted the ultimate proof of why finding your music is like looking for a needle in a haystack and why so few people are listening to you, then this is surely it.

2. It might be hard to fathom where the RIAA is coming from when it is deciding that streaming 100 tracks = 1 sale. As sales are generally £0.99, this would make one play equal to £0.0099 rather than the "best possible" of £0.003 I quoted earlier, particularly when you remember that this figure is derived from streaming revenues of 300 billion a year rather than the industry current of more like 17 billion of streaming revenues. Even with some income from advertising on top, if there are indeed at least 640 million tracks out there, then one sale should currently be worth more like 2% of the "best possible" figure if all artists are to be treated equally. (i.e. more like 5000 plays = 1 sale = £0.99).

3. The figure of 100 streams = 1 sale is also interesting based on our previous calculations. You should remember from earlier that I stated a figure of 10 hours listening a day or 100 tracks being played in a day as the basis for calculations. This would mean the average user was effectively buying a track a day or more like 3 albums in a month if they streamed music for 10 hours a day. It also means that to buy the equivalent of one album a month, you'd actually need to be streaming music for only something like 3 hours a day,  if 100 streams = 1 sale. Interestingly if 5000 streams were equal to one sale, then our 10 hour a day listener would be buying the equivalent of just over 3 tracks a month with a 3 hour a day listener purchasing just the one.

This is really getting to the root of the problem the industry faces. When presented with "all available music" even hardcore music lovers tend to become casual purchasers, yet to accurately filter out something like 90% of this before it ever gets played to make it seem worthwhile to buy leads us back to a situation where we have a "music elite". When you can buy only the tracks you like (compared to a single or CD where you may land up with "padding tracks" that you wouldn't normally buy but which just happened to come free with it), even without piracy it leads to the general behaviour of people buying a lower number of tracks at once.

In summary
After running the numbers, I was actually quite shocked at how bad some of them turned out compared to what I'd thought they might be. It seems clear to me that the miniscule figures per play that streaming services quote are actually quite realistic in a world where artists want equal treatment (if a figure of at least 54 million of them is to be believed). It's also clear that something is going to have to give somewhere for artists to be able to make the same living from music streaming that was possible from CD sales because of the increased competition - instead of a case where only a CD could be sold before (and not every artist would get to make one) now anyone has the potential to make money just by uploading a track.  But clearly, if you're currently receiving at least £7 / $7 /7 euros a month from all streaming services combined I'd say congratulations - you're already a successful artist.

Although independent artists say they want equal treatment, there are clearly way too many artists and tracks out there for the streaming income available. Unless music revenues as a whole make a significant leap in a very short period of time, the future could be a case of the "money pie" being split far too many ways to give anyone enough of an income to live on if the figures I've found and calculated are any indication. The top end artists don't make enough of a difference to everyone else when their money is shared out and would merely increase the number of artists receiving a fraction not much above nothing in an equal streaming world. (compared to a world where the vast majority of artists used to receive nothing at all and a few could break even or maybe turn a profit). We're already seeing the start of this shift with so few long term "superstars of music" being created these days as the money is already being spread more widely than it was before the internet.

Clearly something is needed to lessen the impact of the move towards streaming as there is way too much supply compared to demand. Whether that means the number of artists making music just needs to drop dramatically or whether the reality is such that the "music elite" that so many independents complain about needs to remain in some form (e.g. where only the top 2% of played songs would actually receive revenues) to enable at least some artists to make a proper living from music is unclear. If music sales get completely replaced by streaming at some point in the future it looks to me like artists will still lose out unless consumers are prepared to spend a lot more (basically to take over covering the loss makers the labels have traditionally had) The myth that you can make money as an artist by using the increased audience on the internet will remain just that - with luck a few may, but the vast majority still won't.

Now that you've seen the numbers, how much do you agree or disagree with my analysis, and what do you think needs to change to enable artists to make a living?

Visiting the familiar and new

If you already know about my rating system then skip on down to the next header, otherwise here's the lowdown.

The rating system
The rating system I use for this blog is somewhat unique. It's not a reflection of how much I like the music itself as much as it is of how far I am along the process of conversion from consumer to fan. So, over time you may well see some of these ratings go up if I mention an artist again. And indeed go down, as musical changes of direction or failure to keep my interest are just some of the reasons that may affect a rating.


Congratulations, you've made a temporary blip of interest on my radar. Now how are you going to keep it?


I've seen enough of you to recognise and remember you, but I'm undecided so I'm not really following you (yet). I may make a spur of the moment decision to check in on what you're up to once in a while, but even that's no guarantee. May also apply to artists I am aware of, but whose music I've decided I don't have enough interest in to want to pursue further based on what I've heard.


I'm liking what I hear in general, but I still wouldn't describe myself as a fan. I will be wandering past your site occasionally, and there is something like a 50% chance I'll be buying your next offering once I find out about it, providing I have the money available.


Now I am a fan, so the chances are I'll be past your site once every month or two at least. There's a 90%+ chance your next offering is already sold, and occasionally I might even be going for something more than the basic package (if you have one)


Reserved for very few, this is about as close to internet stalker as you can get. I am actively watching because I do not want to miss your next release date, tour in my area etc. etc. You may not always be aware of the fact I'm looking over your shoulder to see what you're up to, but trust me, I'm there on a weekly if not more like a daily basis. Depending on how you tend to release your information, I may well be signed to your mailing list as well.

Video of the month

In one of those "Whatever happened to...?" moments, I found myself wandering past Dommin's website for the first time in a while. The first album had been publicised on TV over here and I'd liked what I'd heard, but that was a number of years ago and I'd never seen or heard about a followup. From what I read on this visit, it looks like this is yet another case of an artist being bitten by the traditional music industry. Read for yourself as the story goes with the video ("Not Afraid") I've chosen for this month. One thing is for sure, I expect I'll be dropping in from time to time in the near future to see if anything does get released once the label hassles have been sorted. Whilst Kickstarter has been mentioned, I can't help but get the gut feeling that this is something that might do much better with the involvement of Pledgemusic instead, despite the fact I'm not sure if Kristofer has even heard of the site.

Who I've been looking at

It's not often I win something, so it was quite a nice surprise to get an Amazon gift voucher from the music discovery panel I was invited to a couple of months back as a thankyou for responding to their artist surveys. While I was trying to decide what to spend it on, I landed up looking through the latest recommendations the site had for me and ran across a rather interesting artist as a result of my interest in Nemesea. Issa is from Norway and the samples I listened to immediately caught my interest, as they seemed to fall in a range of music I quite like with some tracks reminding me more of  Roxette and others stretching closer to a lot of the Scandinavian rock and metal I listen to. It's therefore something of a shame that her website is a) an extremely poor one page item and b) was so extremely difficult to track down in the first place. There's potential here, but her online presence is pretty much non-existent which is the worst possible thing to be in this day and age, and the videos also seem to be pretty cringeworthy affairs more suited to the 1980s, particularly on the choreography front. In other words, nice music, shame about the rest if you're a potential fan.

For other new discoveries this month, Soundcloud provided one in the form of the electronic act Future User. The track posted caught my interest, however everything I've seen so far looks like a failed attempt to go viral with it, given their site has no information on the artist and no clues are given in their social profiles (which mostly look to have been started just this year) either. The inference is that "future user" may be more well known under another name and the idea was to get people trying to guess who it is/was, but despite the rather spammy Twitter account attempting to direct people to listen to the track it seems this idea has fallen pretty flat (if indeed that was its original intention).

I also picked up on a 15 year old artist on Reverbnation called Brandon Vitale who has some pretty catchy tracks and writes his own music. His biography on there states he is looking for major label and publishing support. The biggest problem for me is that there appears to be no website or plan of attack here. There's no doubting potential but with no visible track record and just a series of recordings it seems rather hard to understand why any label would take a chance on a youngster who seemingly has no performance experience behind them and who is obviously struggling to get people to listen to the music in the first place as he hasn't really formed any connections with people either.

Brad Cox has announced that the new We Love the Underground album is going to be titled "Mouthful of Graffiti", and whilst there's still no firm release date announced it is supposed to be released this Summer. I can't help but feel the irony here - at the rate things are going, this is looking like I'll have seen one album and one EP from Skitzo Calypso and two We Love the Underground albums all from an artist who failed to raise funding on Sellaband before I even see one album from the successfully funded project of Lori Greco who I bought parts in on Sellaband over a year before I'd even heard of Brad and his band projects.

The Pledgemusic project of Poets of the Fall passed the 200% funded mark this month and many of the items available are once again running low on numbers left. It will be interesting to see if the DVD (due August) does arrive before the album from Vertical Horizon, as things are still quieter on their side than I'd like despite the fact the Vertical Horizon album is supposed to have gone off for mixing and mastering already.

Poets of the Fall also directed me to a new artist in the form of Ima, as they had produced her new song. For non-Finnish speakers, whilst you can click on the play icon on the main page of the site, I'd actually recommend clicking on the "Nyt" link at the top of the page instead as this "latest (news)" page currently gives you the soundcloud player, and if you like what you hear, you can download the track in question. Once again, I find myself somewhat underwhelmed by the artist's own site though, as there's actually very little useful information on there once you get past the language barrier.

Things are undergoing a bit of an upheaval in the Matthew Ebel camp at the moment. For starters he's attempting to finish the book portion of the "Lives of Dexter Peterson" project, seeing as the album was out a year ago, meaning it will be something like 3 years from his original announcement of trying to get a 3 part project done in a year that we'll be seeing the end of what has turned into a 2 part project along the way. With only the first couple of chapters illustrated, the graphic novel portion got cancelled a few months ago due to personal problems for the illustrator making it unclear when, if ever, it would get finished. In addition he's behind on writing the custom songs that are due to those who have paid Entourage subscriptions and has stated he's actually thinking about removing the Entourage level as a result because he doesn't want to keep falling behind on the custom song commitment (and I know he has no real idea of what else he could offer in its place and doesn't like accepting money for nothing either). It may therefore be that I won't even be needing to consider whether to stay at Entourage level when my renewal comes due, but rather the question may be what subscription I take instead if this change goes ahead.

Personally, I'm not convinced the removal of this subscription level would be a good idea if there are people willing to pay that amount of money - there's a big difference between 5 people paying $500 a year and those 5 people most likely dropping back to $149 a year when it comes to income - it essentially means you need more than 10 extra fans to appear from nowhere to make up the difference which is not the easiest of things to achieve in a still faltering economy when it's already hard enough for existing fans to keep on supporting you in the first place.

And if that little lot wasn't enough to be working on, he's decided he needs to get more of an "angle" to his shows to try and convince people to book him rather than being just another guy playing a piano. This means he isn't running his weekly show streams at the moment, but instead has been building a set for his basement studio and is working on costumes and storylines as well with the idea of relaunching as a sci-fi themed weekly show similar to the High Orbit podcasts he used to do. However this change is also going to have an impact on his subscription model as he wants to put the resulting videos up on Youtube so potential bookers for live shows can see what they would be getting, which means they are then publicly available rather than exclusive subscriber content. In other words the question then becomes what subscribers will get for their monthly subscription money instead (particularly at the entry level). At the rate things are going, I'm therefore left wondering whether or not his entire subscription model is going to need a reworking as a result of all the changes in progress which seem to impact on it.

I find myself rather in two minds about Aly Cook's latest endeavour. She's still attempting to raise funds on Sellaband for her second album and still has over halfway to go for her current target, yet at the same time has started up an IndieGoGo project for her band the Sou'Westers to raise funds for a video for their first single. On the plus side, an IndieGoGo campaign does at least ensure she will get whatever money it manages to raise and I can see the idea was to treat it as an album presale campaign, but on the minus side there's the thought that having this second project running at the same time as the first isn't really such a good idea as people have limited money and can't put it in two places at once.

The sites I've been looking at
 Interestingly I haven't been looking at any sites in particular recently as it seems more like I've been on a random wander between a lot of my usual haunts to see if any new artists pop up during my listening time on them.

The only thing I did pay some attention to was the finish of the "Bandcontest" on Sellaband. Interestingly not only did one artist actually meet the target (despite this looking very unlikely to happen for most of the month the contest was running), it seems they exceeded it by a rather round looking 20%. With three hours to go, this same artist was on 80% of funds raised and as little as 24 hours before the end of the contest they had still been stuck on somewhat less than 20% of funds raised. Interestingly, the second artist in the competition also made a rather round looking 80% of their total budget by the end of the contest, despite having been in single digits of funds raised with 24hrs to go. The third of the 3 artists barely moved in the last 24hrs, finishing the contest on 5% of budget. I'll leave it to the conspiracy theorists (and you) to decide whether we actually saw an old style last minute rush to buy as with the Sellaband of times past or whether some convenient number fixing took place to avoid the embarrassment the contest was looking likely to turn into if you'd been following its progress from the start.

And finally...
I've been crunching some numbers recently from data freely available on the internet as a result of the debate on whether artists are actually being paid enough for streaming music and the RIAA's recent announcement that 100 streams should count as one sale. I'm in the process of writing up the rather interesting looking results of that into what should form my next blog post (hopefully within the next week). Suffice it to say that at best the results should give you something to think about and at worst may actually scare you. Irrespective of whether you're a listener or a musician, this is one post I think you definitely won't want to miss.