Why a per-stream rate is the wrong number to quote

Ask what a stream pays and you will get a figure — a third of a cent, half a cent, a cent on one service and less on another. The figures circulate because they are easy to say. They are also the most misquoted number in the business, and the reason is not that the figures are out of date. It is that there is no such rate.

How streaming services actually pay

The large services pay from a pool. Each month, the service takes its subscription and advertising revenue for a territory, keeps its share, and divides the rest among rights-holders in proportion to their share of total streams in that territory. Your money is your streams divided by everybody's streams, times the pool.

So what a stream "pays" depends on:

• The territory. A subscription costs a different amount in every country, and the pool follows.
• The listener's plan. Ad-supported, standard, student, family and mid-tier plans contribute different amounts to the pool per listener.
• How much everybody else streamed that month. More total streams, smaller share per stream, same pool.
• Your deal. A distributor's or label's share comes off before the money reaches you.

None of that is on the stream. It is on the month, the country, the plan and the contract. A per-stream rate is the average of all of it, after the fact, for one catalog.

What is wrong with the quotient

Take a royalty statement, divide total earnings by total units, and you have a number. Here is what is in it.

Units are not all streams. A statement's unit column counts streams on the streaming stores, downloads on the download stores, and video views on the video platforms. A download can pay a dollar; a video view can pay a hundredth of a cent. Averaging them produces a figure that describes nothing.

Territories are mixed. A catalog with most of its listening in a high-subscription-price country will show a high quotient; the same catalog listened to in a lower-price country will show a low one. Neither is a property of the music.

Plans are mixed. The same service, same country, same month: a subscription stream and an ad-supported stream contribute differently to the pool and pay differently.

Sub-cent rows distort it. Round the rows to cents before dividing and the total is wrong; the quotient inherits the error.

The quotient goes up and down month to month for reasons that have nothing to do with the catalog, and anyone who quotes it as a rate will be surprised by the next statement.

What to measure instead

Net per month, by store. Concentration is the risk. If one store is more than sixty percent of earnings, one company's playlist and payout decisions govern your income.

Net per month, by territory. Where the money comes from tells you where to promote, tour and pitch for sync.

The distributor's effective rate. Where a statement reports gross and net, net over gross is what distribution costs you. This is a rate, and it is worth tracking.

Units that were reported and not paid. Platforms label streams they have refused to pay for. A rising share of those is a warning.

Trailing twelve reported months. The best single measure of what a catalog earns, because it smooths the store payout cycles.

What SNVRKOTICS does

The statement reader shows all of the above and deliberately does not compute a per-stream rate. Its breakdown page says so, in the sentence beside the unit total: units mix streams, downloads and video views by store, so that figure would not mean what it appears to. The combined export repeats it on the methodology sheet.

If you need a number to say out loud, say net per month and the store share. Both are true.