Do subscription services such as Rhapsody pay the artist when the tracks are streamed?
Yep! That's what the subscription fees are for : to pay the labels/distributors/artists for the permission to stream the music.
Rhapsody, Napster, MusicNet/Yahoo, etc : they all pay about 1-2 cents per person per listen. (A person listens to your song 10 times, you get paid 10-20 cents. Your song is played on a streaming station that 1000 people are listening to, you get paid $10-20.)
Where it gets interesting is in transferring songs to portable devices:
My Sansa Connect connects to my Yahoo Music account over wifi, and I can download songs or albums anytime. Say I listen to, then transfer your song to my device. Then I go offline, and while walking around the city or on a plane or at the beach, listen to your song 10 times. Next time I go online, the device reports back to Yahoo that I listened 10 times while offline, and you get paid for each time I listened.
I really enjoyed this past summer walking around London for a few months, with my little device recommending music to me all the time, knowing that each new artist I was checking out was getting paid just for me checking them out. I was able to say "Sure - why not?" to everything they recommended, since it cost me nothing but my subscription, yet the artists (ok, well, their labels) all got paid.
Sorry - I swear I'm not working for Sansa or Yahoo. Just had an educating summer of music discovery with this little thing, and it was an interesting new way of thinking about a music collection (or lack thereof).
Thanks, that's quite interesting. I wonder how well it serves an artist to be on a subscription service. For example, can it be generalized how many listeners are inspired enough to buy the tracks/cd after hearing it through their subscription service? Unfortunately on rhapsody's basic membership, though I think I read it is possible, I don't see any obvious link there to buy the tracks for permanent download.
Seems like at 1-2 cents, lesser known artists may not benefit significantly?
Peter Wells, SVP Operations, Customer Advocate - Tunecore
They do indeeed pay, Eric. Every streaming service will have its own set Pay Rate, or at least have a formula for calculating the Pay Rate depending on their business model.
The thing to watch out for is "promotional" streamings. That is, a lot of subscription services let people stream any music in their catalog, limited by count or by a date range or both, and those are consider "trail" or promotional. If one of those songs happens to be yours, it'll show in your accounting as a stream, but the Pay Rate will be zero. And you better like it, because there's no opting out of it.
This is a sticking point for some folks, and it's why I was very, very careful to put in generous warnings in our FAQ and whenever someone puts an album into the TuneCore system and selects a store with this policy. You should at least KNOW when the possibility exists that your music is being given away in order to promote a business other than (albeit linked to) your prosperity. If that idea makes you uncomfortable, I urge you not to select those stores.
That's yet another reason why we give choice to the customer, album by album, of what stores they want their music delivered to. Not all stores are created equal.