byÂ Paul Resnikoff
You might want to start working on yourÂ Microsoft Groove account (hint: NOWâ€¦)
For the past year or so, Digital Music News has been publishingÂ streaming royalty statements shared by artists and labels. Â Since the project began, weâ€™ve published payout details from Spotify, YouTube, SoundCloud, Deezer, Google Play Music, Napster (formerly Rhapsody), and even defunct services like Rdio (if you have anything to share, email it to us at email@example.com, of course weâ€™ll protect confidentiality as needed).
Most of these payouts were very low, but several months ago,Â things started getting strange. Â Two services in particularÂ â€” Tidal and Microsoftâ€™s Groove MusicÂ â€” were showing abnormally high payout rates, for reasons we couldnâ€™t quite figure out. Â One explanation was that these were smaller servicesÂ with subscription-only plans, thereby raising the money pool, lowering the number of streams, and elevating royalties significantly.
Whatever the reason, smart artists and labels quickly saw an opportunity to game the system a bit, and make some serious money in the process.
The first person to tip us off to higher Tidal and Microsoft Groove rates was the head of an indie rap label. Â As part of a test of streaming service payouts, which we first reported on back in May, this person unearthed the following rates from Tidal and Microsoft Groove. Â Compared to Spotify rates that often hover around half-a-cent (or $0.005) a stream, and oftentimes worse, these were about ten times the payout.
Usually when spikes and abnormalities like this appear, everyone rushes in and kills the party. Â But not in this case: instead of these rates normalizing towards low-level Spotify payouts, it appears that payouts on Microsoftâ€™s Groove Music are heading even higher. Â And not just a little bit higher, multiples higher than before.
That includes payouts of more than several dollars per single stream, according to the statements weâ€™ve reviewed (and are about to present). Â Specifically, an average of $4.67 per song played in the statement we reviewed.
(Quick note before going further: Microsoft has changed the name of its streaming music service a few times over the years, and weâ€™ve seen at least three different names on streaming royalty reports. Â That includes Xbox Music, Musiwave Xbox, Zune, and Groove, with otherÂ variations included).Â
Hereâ€™s a quick look at some of the payouts that this label is seeing from Groove. Â As you can see, these are payouts of several dollars per stream, consistently.
The label itself, as well as roster artists and identifying information like ISRCs, have been scrubbed here. Â But we can say that this is an independent r&b and hip-hop label with a substantial number of artists. Â This is all distributed through INgrooves (we took the .xls statement and uploaded it into Google Sheets).
Astoundingly, we found the average payout to this label during the month of May was $4.67, per single stream. Â The owner of the label was as shocked as we are, with both of us scratching our heads to figure out whatâ€™s going on. Â One theory is that these payouts are coming from a subscription-only group with limited usage of Groove, which would naturally bump up the per-stream payout.
Another equally plausible theory is that Microsoft is simply paying incorrectly, and accountingÂ $4.67 instead of $0.00467 (or, some other variation like $0.0467).
It should be noted that this label head is actively working his music promotionally within the Xbox gaming platform, partly with the devilish intent to take advantage of these elevated per-stream payouts (weâ€™ll have more details on that ahead).
And hereâ€™s the complete spreadsheet to check out.