Apple Music Is Extracting More Money from Musicians Than Spotify—And No One Seems to Care

For years, the conversation around streaming royalties has been stuck on "per-stream" payouts. Spotify gets hammered for paying a lower per-stream rate than Apple Music, and Apple gets to parade around as the artist-friendly alternative. But I believe this entire conversation is missing the point. The real issue isn’t what platforms pay per stream—it’s how much of their music revenue they keep versus how much they actually pay out to the industry.

And when you dig into those numbers, Apple should be the one getting dragged—not Spotify.

Now, a disclaimer. I do not have perfect information. I had to estimate a bunch of things based on what we’re told and what is generally undisputed. Namely, when Spotify says they paid out $10 billion to rightsholders publicly, I’m going to believe them. When nobody disputes that Spotify pays 70% and that Apple Music pays 52%, I’m going to use those numbers to extrapolate other numbers. Even if my numbers are a bit off, the illustrations work and the conclusions are the same.

Please feel free to tell me what I got wrong! I welcome the opportunity to continue to build on what I know and where I get things wrong.

Spotify Pays 70% of Its Music Revenue—Apple Only Pays 52%

Spotify has been clear about its revenue split: 70% of its music streaming revenue goes to rights holders (labels, publishers, artists). This percentage applies to both their paid subscribers and the ad-supported free tier. Yes, the “free” tier drags down their per-stream average, but it also creates a larger pool of revenue for the music industry overall.

Apple, on the other hand, pays out only 52% of its revenue. That means Apple keeps nearly half of the money it makes from music streaming, while Spotify keeps just 30%. And yet, Apple gets to frame itself as more generous simply because they don’t have an ad-supported tier, lowering its per-stream averages.

Exhibit A: The Revenue Breakdown

Look at the numbers. The spreadsheet below lays out the estimated revenue breakdown for both Spotify and Apple Music over the last four years. The numbers in green are estimated based on the percentages that are undisputed. I had to guesstimate Apple’s top-line music revenue for 2024, so I assumed slightly slower growth year over year.

A few key takeaways:

• In 2024, Spotify generated about $14.29 billion in music revenue and paid $10 billion to rights holders.

• Apple generated (about) $10 billion in music revenue but only paid about $5.2 billion to rights holders.

• Apple pocketed $4.8 billion from music revenue, while Spotify only kept $4.29 billion—despite bringing in significantly more - probably about $4 billion more - in total revenue.

• If Apple paid out the same 70% as Spotify, they would have distributed $7 billion to rights holders instead of $5.2 billion. That’s an extra $1.8 billion that should have gone to musicians and labels—but Apple kept it instead.

Apple Makes More Per Subscriber—And Still Pays Less

One of the biggest misconceptions is that Apple is more generous because their per-stream payout is higher. But this ignores the fact that Apple is making more revenue per user than Spotify—and still keeping more of it.

Spotify’s lower per-stream payout is a byproduct of its business model: they run both an ad-supported and a premium subscription tier, similar to how YouTube Music operates. Their free tier generates revenue from ads, and many of those users eventually convert into paying subscribers. This model helps expand the overall pie, even if it lowers the per-stream average.

We can get into a conversation about whether or not the free tier should exist at all. I’m happy to discuss! The question remains, if people didn’t listen to Spotify on the ad-supported tier, would they buy a subscription to Apple or Spotify or would they go to another “free” ad-supported option like YouTube Music or even the more radio-like Pandora?

Back to Apple.

Apple has no free tier. Every Apple Music stream comes from a paying subscriber. That means their revenue per user is higher—but instead of passing that extra money on to musicians, they keep 48% of it for themselves.

The Real Question: Why Isn’t Apple Paying 70%?

Spotify gets crushed for having an ad-supported tier, but if you isolate just its paid subscriber revenue, it actually pays out more per dollar than Apple does. And yet, no one is asking Apple why they don’t pay the same 70%.

If Apple matched Spotify’s payout percentage, it wouldn’t just be keeping pace—it would be leading the industry in artist compensation. Instead, they’re extracting more value per subscriber than Spotify while paying out less overall.

Musicians Are Complaining About the Wrong Company

Apple is getting a free pass while Spotify takes the heat. But if artists truly care about how much money actually gets into their pockets, they should be putting pressure on Apple to increase its payout percentage.

This isn’t to say that Spotify is perfect. Their free tier is a contentious issue, and the industry should be debating whether ad-supported streaming is a net positive or a race to the bottom. But Apple's decision to pay only 52% is a direct, deliberate move to keep more money for themselves—and nobody is talking about it.

So if you’re upset about streaming royalties, don’t just blame Spotify. Start asking Apple why they aren’t paying 70% like their competitors. Because as it stands right now, they’re the ones taking more money from the musicians they claim to support.