Music streaming records get broken every full moon these days, which makes the novelty of album-equivalent units (AEUs) hard to judge. And unless you care enough to do some research, these seemingly made-up numbers—in some cases actual made-up numbers—next to the names of obnoxiously famous artists won’t help you understand the value of an RIAA platinum plaque in today’s world.
But this article will.
My first look into the streaming-is-cheating myth was in a piece comparing the commercial successes of Drake to Lil Wayne and Jay-Z. I still stand by the conclusions in that piece, but several details about the AEU formulas used by Billboard and the RIAA need to be cleared up and expanded upon.
It is true that 1,500 streams used to equal 1 album sale on the Billboard charts and 150 streams equaled 1 sale of a single…until 2018. (I would have linked to Billboard directly, but they now require Pro access. Womp.)
In May of that year, Billboard announced levels to this shit: streams from premium members of digital music platforms were given more weight, and streams from free users of digital music platforms became nearly three times less valuable than they were in pre-2018 sales counts.
Today, Billboard counts 1,250 premium member streams as an AEU and it takes 3,750 ad-supported (i.e. free) streams to earn the same. Meanwhile, the RIAA has held onto the 1,500 streams per album rate for their gold and platinum certifications. It seems like 150 streams still equals the sale of a single according to both authorities.
People who don’t pay to stream still contribute to sales. How?
Streaming platforms pay artists with money received from subscription fees and advertisers. Below is a breakdown from Spotify reps of their own payout process:
(UPDATE 7/22/2020: the video has been removed from Spotify’s YouTube account. Here’s a highly-informative breakdown of the payment process from Record Player Pros though)
Perhaps you are not giving Post Malone a dime when you stream those two guilty-pleasure Beerbongs & Bentleys tracks on your work commute playlist. But the advertisers who invade your mind in between the hundreds of times “Psycho” and “Better Now” play in your car are paying. Not all of what they pay goes directly into Malone’s pockets, but the attention you give to his music creates the sonic ad space in your car purchased by advertisers. So yes, free streams generate money.
Even at the lowest per-stream payout rate Spotify claimed to offer in 2013—$0.006, or six-tenths of a cent—an AEU of 1,500 streams would mean $9 worth of streams qualified as an album sale. At Spotify’s highest per-stream rate of $0.0084, 1,500 streams would equate to an album that cost $12.60. According to Spotify in 2013, payout rates increase as more paying subscribers join the platform. These 2019 revenue estimates using 2013 rates are likely modest. For perspective, the average price of an album in 2014 was $11.97.
Using the new Billboard formula, the monetary value of an AEU significantly outweighs a pure sale (digital or physical purchase) of an album. At the low-end of Spotify’s 2013 payout rate, 3,750 ad-supported streams is $22.50 in generated revenue. This competes with even the highest average album prices of the 1970s.
So back to your casual streaming of Post Malone singles: as far as the economic impact goes, you may as well have bought a copy of Beerbongs & Bentleys at Target every few months. To put it plainly, streams are just as legit as sales.
Even if we assert the unverified yet plausible insider claim that 3-4 percent of global streams are fake, Ariana Grande’s “thank u, next” being streamed 100 million times in 11 days is largely not the doing of bots. Neither is the 1 billion streams Scorpion received in its first week. Some artists have the power to make millions of people devour a record. It’s been like that since Al Jolson when fucking sheet music was flying off the shelves…or wherever people bought sheet music.
In the past, the valuation of a fan’s record consumption was measured strictly through one-time upfront payments. In today’s game, every little bite has a value placed on it. This is different, but not necessarily more or less fair to pre-streaming artists. And if there was an argument to be made about fairness, AEUs are actually balancing the scales for artists of this millennium, not tipping them.
Revenue from U.S. music sales and licensing dropped by more than half between the 1990s and the 2000s decades, and pure sales are endangered, especially in hip-hop where #1 albums attribute a healthy majority of their sales to streaming. Contrary to popular belief, making AEUs official to accommodate streaming is a response to an era of dying sales, not a cause.
Streaming in music is like the 3-point line in the NBA. The advent of it has made the game faster and more accessible to different players. But to this day, you can count on one hand the players who have approached Wilt or Jordan-level seasons of scoring. Also, only a handful of players have built legendary careers using the game’s new rules as the foundation. Likewise, it’s unlikely artists setting streaming records today will have an album that outsells Thriller, and only a couple of artists will enter Beatles/Michael/Elvis territory through streaming dominance.
There’s plenty to criticize the streaming revolution for—rushed consumption of albums, bloated tracklists, a greater obsession with numbers—but it hasn’t cheapened the value of milestone commercial achievements. Despite the petty games some A-list artists play in pursuit of sales, platinum plaques and #1 songs and albums are still hard to come by. Besides, none of today’s shifts in the music biz are that original: Sinatra fans in the 1950s crying about radio killing the jukebox are today’s ’90s babies complaining about new-age artists staying relevant with barely any pure sales.
More important than reminding music streaming critics that bots don’t create legends is this: streaming lowers the barriers of entry in a historically exclusive industry. The music business will always be shady, but streaming allows the rapper with a fifty dollar mic and a budget for beat leases to have their music available in the same places as their favorite artists. Also, that DIY rapper can make money and possibly fund a mini-tour, their next project, or just feel validated by it.
Streaming is not the Devil, so get over it. And don’t leave a link to the TIDAL fake stream scandal in the comments, I’m way ahead of you.