Prince didn't like streaming, but it could be a big boost to his estate anyway
Prince, famously skeptical of streaming media when he was alive, is increasingly likely to see the fortunes of his estate boosted by digital in his death.
That is because last week — when a big chunk of the musician's catalog reappeared on streaming platforms such as Spotify, Apple Music and Napster — his fans flocked to listen to albums that had been systematically kept from them by Prince himself since 2015. The sole exception was Tidal, the service co-owned by Shawn "Jay Z" Carter that gave him complete control over the way his catalog was presented — and paid him well enough.
Despite Prince's contention in a November 2015 interview that no musician "got rich off digital sales," the sudden reappearance of his music on streaming services may prove to be a big posthumous boost to his estate — just as it was for Michael Jackson, whose music royalties put his estate back in the black after he died. That is because since last year, streaming now counts toward singles and album certifications.
In the week following his music being re-released to streaming platforms, Prince songs were streamed nearly 6 million times, according to data from BuzzAngle Music, rivaling the 7.8 millions of streams his music saw week following his death in April 2016.
To be certain, the economics of the streaming business depends largely on the profile of the artist. The more famous the artist, and the larger the fan base, the more lucrative streaming plays can be.
Spotify does not disclose its average royalty rate for artists. However, in May 2016, Digital Music News reported on an anonymous group whose music had been streamed on the service more than a million times between October 2013 and February 2014. The group received a total payout of less than $5,000, or less than a cent per stream.
Trent Ramseyer, a drummer for the California-based independent rock band Whores of Tijuana, told CNBC recently that since May 2010, the group has had approximately 80,000 streams on Spotify. It has received total royalties of $339.
Explaining that payouts vary, Ramseyer said that his group has "never been given an explanation of price breakdowns, but I believe they are affected by how long the song is actually played or completed." While that amount may seem insignificant, Ramseyer disagreed, citing the changed nature of the industry.
"For small, independent bands, this amount can outperform CD and vinyl sales, since streaming music has become an easy format and there isn't material cost," he said.
Yet for a marquee artist — especially an established one whose audience rediscovers them after death — those figures can be significantly higher.
Several songs from Prince's breakout hit "Purple Rain" — which is certified multiplatinum by the Recording Industry Association of America — immediately surged to the top of Spotify's "Viral 50" charts in the days following his return to streaming. The album was also the most streamed Prince album in the days following its reappearance on streaming platforms, BuzzAngle data showed.
"An artist can net around $70,000 per 10,000,000 streams on Spotify," said Christian Barker, a Nashville-based entertainment attorney who specializes in musician royalties. He told CNBC that streaming is immensely profitable for pop artists.
"Michael Jackson has netted between $5 million and $10 million annually in streaming revenue alone since his death," he said.
Some have argued that, by making his music available digitally, Prince's wishes have been dishonored. However, Barker said that streaming may help his estate gird itself financially, being that he died without a will.
"At this point in time, the best way to preserve those assets and therefore prolong the charitable impact of the estate, is to monetize the estate in any and all possible ways," he said.
One of those ways include a resurgence in old album sales, as well as bringing daylight to a hidden cache of music.
A reissue of Prince's 1984 album "Purple Rain" is due in June, along with some previously unreleased music. Mara Schwartz Kuge, president and founder of Superior Music Publishing in Los Angeles, said that there is likely to be a large receptive audience for it.
"Prince is still a tremendously popular artist, even with younger audiences," Kuge said. "He was actively touring until literally the week he died, and his songs have held up brilliantly."