French streaming service Qobuz recently unveiled its average payout per stream, claiming to offer a higher payout than its main competitors. Has the platform found the right balance between high audio quality for music lovers and fairer compensation for artists?
Five times more revenue
While streaming services have helped curb illegal downloading and revive the music industry, they are regularly criticized for how little they pay artists. Although figures are difficult to obtain and often unclear, as they depend on numerous variables, one thing is certain: not all platforms are created equal. From one service to another, revenue can vary fivefold.
Qobuz could well be the most generous platform when it comes to compensation for artists, with an average payout of $0.01873 per listen, or $18.73 per 1,000 streams. This is considerably higher than its main competitors, notably market leader Spotify, whose latest estimates suggest a payout of between $0.003 and $0.005 per listen – or between $3 and $5 per 1,000 streams. Although these amounts vary according to the popularity of the artist and the revenues generated by the Swedish platform, they remain well below those posted by Qobuz.
Greater profitability
This generosity is partly explained by subscription prices that are slightly higher than those of the competition. Qobuz has an entry price of €12.49, compared with around €10 for most other platforms. This difference is justified by the quality of the service: the entire catalog is offered at least in CD quality (16-bit/44.1kHz), with a large selection available in Hi-Res up to 24-bit/192kHz. What’s more, Qobuz does not offer any ad-based free subscriptions, a choice that avoids diluting revenues per user. The result: average revenue per subscriber reaches €117.60 per year, compared with a market average of just €21.73. This ration is almost five times higher, which directly benefits the compensation of rights holders and, in turn, artists.
Qobuz also claims to be the only streaming platform to have its average payment per stream examined by an independent auditing firm. However, it is important to note that the remuneration paid by the service concerns the rights holders, most often the record companies and labels. It is therefore highly likely that the sum received by artists is lower than these figures, and highly variable depending on the individual contracts signed with the latter.
