Compared to terrestrial radio, by far the most popular music format, new streaming services pay out a much higher rate on a per-listener basis to record labels, according to calculations by David Touve, Assistant Professor of Business Administration at Washington and Lee University. Since record labels are not paid for plays on terrestrial radio in the US, a good place to look is the UK market.
According to Touve’s calculations, the per-listener value of a spin in the UK is $0.00012. That small amount is just 1/36th a typical per-listen value ($0.0042) paid by Spotify, 1/10th the rate ($0.0011) paid by pure-play webcasters such as Pandora in the US and 1/18th the CRB-established webcaster rate ($0.0021) in the US.
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