The calculation widget above allows musicians to compare their profits with Resonate versus our competitors.
For the sake of clarity, Resonate currently takes a 30% commission from all income, meaning 70% goes straight to the artists. (This percentage will likely go higher once we determine the best method for paying writer royalties — composer payments will come out of the Resonate 30%, not the artist 70%.)
This royalty calculator comes with a few caveats, so a bit of explanation is required…
We chose to go with a rate of $.006 per-stream to represent the competition for a number of reasons.
After literally days of exhaustive research, it was almost impossible to find any consistent numbers. By example, Spotify states they pay an average of $.006 to $.0084 but as you’ll see in this spreadsheet there are numerous reports of much lower rates. (To be fair, their royalty rates may not be very consistent because they have a dual model for ad-supported versus premium plays and it’s really not clear what their quoted rate applies to.)
Apple Music comes in around 0.005643 but it’s been VERY hard to find many references.
Numerous reports put Tidal rates around .012 per-stream, maybe because they’ve got a $20 a month version of their service. Their market share isn’t anywhere near Spotify’s, so we don’t let that skew the math in the other direction too much.
And then there’s YouTube. Fact is, streaming music on YouTube vastly outweighs the other platforms. We’ve seen better data, but this article will suffice for now. Their most often quoted rates? Around 0.001 per-stream.
So with YouTube on a miserably low end, Spotify and Apple in the middle and Tidal on the high end, we end up with a basic average of $.006 per-stream by comparison.
As most everyone knows, Resonate has a very different listening concept known as stream-to-own.
In this model, the first play starts out really cheap (at .002) and then doubles until reaching just over one unit – the price of a normal download.
When you see the total number of plays within the calculator, the Resonate plays are not based on that total number x .002, but rather a sliding scale of repeat listens…
50% – first play
20% – second play
10% – third play
6% – fourth play
5% – fifth play
4% – sixth play
3% – seventh play
2% – eighth play
1% – ninth/purchase play
The idea being here that half of the people that listen to a specific song once, 20% listen a second time, 10% will listen a third time, etc.
Obviously we have no way of knowing exactly how this will actually break down. But even if the percentages are slightly different, it’s quite clear that musicians stand to make a lot more with Resonate than Spotify.
Considering the fact that we also have the potential to reach an even larger market than many of our competitors, shows that our fair trade music philosophy isn’t just the right thing to do, it’s potentially MUCH more profitable for all concerned.