Streams vs Sales

So let’s dive right in and say of course sales can be more profit than streams as far as a cost to consumer. But let’s also keep in mind the vast difference in gaining a stream versus gaining a sale. As of right now, the streams to sales ratio on a single song is as follows:

1’250 Premium Audio Streams

3’750 Ad Supported Streams

3750 Video Streams

=

One Album Unit

That’s insane, right?

Now let’s suggest (to make things easier) that you get 1250 premium streams to get your 1 sale. What did it take to gain the 1250 streams? Obviously nobody spent money specifically on your song, but obviously they spent a premium fee for their account. As a consumer, spending $9.99/month on Apple Music isn’t terrible considering if they spent $9.99 on buying songs they would be very limited. So consumers are winning big time with this system.

Now chance’s are, you’ll get a few sales depending on some things, but you won’t touch the amount of streams versus sales in most cases. And then you have to consider the difference in profit. If a song download would normally cost $.99, then what does a stream make you?? This is where it becomes a sad world for most independent artists..... Fractions of pennies. Sometimes pennies but in most cases, fractions. Most platforms have much different breakdowns and equations to how they pay you per stream. Spotify being one of the absolute worst, at a whopping $0.0038 per stream. YouTube being a disgrace at $0.00074 per play. Imagine that. Apple Music doesn’t do much better at $0.00783 per stream, but I’m bias since that’s my go-to for myself. But Tidal takes the cake.... (drum roll please......) $0.01284 per stream! Alert the media, right? Wrong. There’s a problem (for independent musicians) when consumers can spend $10/month, listen to all the music they want, and the creators of that gains pennies or even less. But that’s another topic. Plus these are general averages but pretty spot on in most cases.

I’m going to use an album that i released a little over a year ago and I’m going to specifically use Spotify reports for my example. In its first week of release, it gained 20’327 streams via Spotify. First off, thank you. That was a really cool week :).... Anyways... The payout for those royalties in specific amounted to roughly $65. I’m assuming quite a few premium. But even still, “meh” at most... Obviously in comparison to 20k sales being roughly $20k, I understand the cause and reasons for streams to be the lesser of these. Although solutions are constantly being worked on and all in all, you have multiple outlets. Cause it’s NOT as easy as just saying every stream is going to generate 10 cents. The company would go broke.

So back to the main point of “Streams vs Sales”.... To gain $100 from sales, get roughly $100 in sales (duhh)... to gain $100 from streams, now it gets interesting... It would take about 500k ad supported streams to generate $100. And all of those are still before any fees you might lose to your distributors, publishers, etc... Just know your ROI. If you’re looking for sales and have a funnel, use it if it’ll work. Try it. Just be sure to market the hell out of your streaming sites. If you’re investing $500 in marketing and ad performers, then be sure you’re making more than that in return... Or simply market other areas that are more beneficial.

All in all, you need a ton of streams on various platforms to get a huge amount of streaming royalties. For fun, here are some averages and realistic numbers to use for your own goals:

Based on 500k Streams

Spotify: $2000

Apple: $2500

Deezer: $2350

Tidal: $6000

Pandora: $700

Based on 2.5 million Streams

Spotify: $10’000

Apple: $12’500

Deezer: $11’750

Tidal: $30’000

Pandora: $3500

Some of those are crazy right?! I chose 500k Streams to 2.5 million Streams as those are easily achievable if you have a quality record and you are promoting to playlists. Playlists are everything when it comes to this. Also, a big power move on albums would be more songs. Pack 20+ songs into an album and find out how you gain more album sales... Just some random thoughts. Thanks for reading. I hope I’ve brought some sort of value to your future.