Apple Music said it will pay artists a penny per stream - double what Spotify pays

• Apple told artists that it will pay them a penny for every stream from a listener.
• That is about double what Spotify pays its artists.
• A movement has launched in the music industry for streaming platforms to pay artists more.

Apple Music is telling artists that it will start paying one cent per stream.

The company told artists the news in a letter, which was viewed by Insider, that will be posted on the platform's artist dashboard on Friday. The Wall Street Journal first reported the letter.

"As the discussion about streaming royalties continues, we believe it is important to share our values," Apple said in the letter. "We believe in paying every creator the same rate, that a play has value, and that creators should never have to pay for featuring."

In November, the largest music streaming platform, Spotify, told artists they could promote their music to more users in exchange for lower royalty payments.

Apple in the letter also said it pays 52 cents of every dollar to record labels. Apple did not immediately respond to Insider's request for comment.

Apple's new penny-per-stream move is notably one that the reigning streaming giant, Spotify, has not made. It has 155 million paying subscribers and pays less than a cent for every song streamed - somewhere between $.003 and $.005.

Apple's proposed rate increase then amounts to about double what Spotify pays per stream. Spotify did not immediately respond to Insider's request for comment.

Read more: You can now stream Spotify directly on the Apple Watch.

Streaming companies pay royalties to rights holders and other intermediaries, like publishers, distributors, and record labels, before the money eventually is distributed to the artists.

In March, Spotify unveiled a website that attempts to break down some of the data on how it distributes payments, including a tiered look at the recording and publishing revenues generated by artists' catalogs. Only about 13,400 catalogs were generating $50,000 - or the equivalent of a livable wage in the US - in 2020, as Music Business Worldwide reported.

Artists across the industry have been critical of Spotify's payouts. The Union of Musicians and Allied Workers, which consists of more than 27,000 figures within the music industry, has called on Spotify to increase its royalty payments to one penny per stream. The group is also asking the platform to adopt a user-centric model. That means that streaming services would pay artists based on a fan's total listening time, a practice that SoundCloud took on in March.