, — Future of Music Coalition (@future_of_music) May 4, 2020. That’s why you’ll see these figures in the press, based on data that an artist or label has shared with them. It’s a business decision on their end that bulks up their value to Wall Street where growth is everything. petitions calling for the company to triple its payouts “immediately”, Spotify’s ‘tip jar’ is a slap in the face for musicians. Skip tracks. Spotify doesn’t pay out $0.00348 per stream, so it can’t suddenly decide to triple that to $0.01044. Another way to look at this, though, might be that ending the historical separation of streaming and fan-funding might be a good thing. If subscribers will swallow it, increasing the price of a music streaming subscription seems like a straightforward way to increase the pool of royalties. I realize that digital downloads aren’t exactly what’s Will is proposing, but it shows unlimited streams for a flat subscription rate winning out with consumers over a la carte pricing. Estimates vary on how much a Spotify stream is worth to artist: from $0.006-0.0084 to as low as $0.00318/stream; Spotify went public in April 2018, with a valuation of $26.5 billion by the end of the first day’s trading; Spotify market cap in early May 2020 was $26.9 billion; Highest market cap to date is $35 billion during Q3 2018 Technology allows us to access our chosen music anywhere, any time and anyhow! The service reportedly paid out $0.01284 per stream earlier this year. From Bandcamp’s recent revenue-share-waiving sales days to the bonds being forged between creators and fans on platforms like Patreon or Twitch, there are plenty of reminders right now that paying people because you give a shit about them and their work can be… wonderful. Still, that leaves 163 million Spotify listeners who aren’t paying… yet. ‘Spotify should pay artists more’ is a good rallying call, but it’s not a solution until you address the question of ‘how?’ That’s a discussion based around several more questions, which we’ve presented below. Spotify doesn’t have a fixed pay per stream and we can only give an approximate answer as to how much you will earn per stream. As of 2019, Spotify reported that they pay between $0.00331 and $0.00437 per stream to artists for their songs. It is estimated that Spotify pay £0.0031 per stream. C. It’s all about the pool – and how it’s divided. How much does Spotify pay per stream? Spotify is a digital music service that gives you access to millions of songs. To triple its payouts, it would either have to triple the percentage of its revenues that it pays out (to, er, 195%) or triple the size of the royalties pool itself. Some online calculators, however, have the rate slightly lower. Obviously, you need to get A LOT of streams in order to make any kind of decent income from Spotify. Not random ads for car insurance – but targeted ads fans will want to hear – concert and new release announcements by bands they listen to (for instance). It should pay them better, its 2019 figure for Spotify was $0.00348 per stream, sparked fury among the US publishing community, when asked about it last week during Spotify’s latest quarterly earnings call, announced its desire to run a pilot by early 2020, Bandcamp’s recent revenue-share-waiving sales days, 3) Apple Music Historically, Apple Music has paid artists much better than its streaming music rival, Spotify. Spotify is the lightning rod for this unrest, partly because it’s the biggest subscription service and the one most closely identified with the emergence of the music-streaming model; partly because memories are still fresh of it going public (current market cap: $27bn); and partly because its numbers (users, revenues, losses etc) are published every quarter. You have an amazing thing – it just needs to be fairer#TimsTwitterListeningParty. 3. How much does Spotify pay artists? How much can you expect? 2 How much of their earnings do artists get, does Spotify take a cut. That means an artist would need roughly 366,000 streams on a track just to make minimum wage. As a system, user-centric ‘feels’ fairer: your money goes to your favourite artists. Nor does it mean that every smaller, independent artist would be a winner from the change: it depends on how intensely their fans stream them. How many artists would be comfortable with audio-streaming giants playing a dominant role in their direct-from-fan revenues? Assuming the popular song is paid at the highest price of .0084 cents per stream for 11 million listens, the rights holder or holders will earn $92,400 before splitting the earnings. How much does Spotify pay per stream? Many are worried that streaming royalties aren’t providing a sustainable income. Spotify’s pay per stream varies in different countries and regions, but the average is $0.004 per stream. Spotify ends their unlimited free service and they will have plenty of money to increase what they pay to artists. If the appeal is lost (or hadn’t happened in the first place) and Spotify was paying more like 70% of its revenues out again, is that still too low? Streaming Royalty Calculator is a tool which helps estimate your payout per stream. Which brings us on to the second, bigger challenge. So doing the math, 1000 streams would translate to roughly $4.37. Visit our. Soundcloud generally doesn’t pay musicians for their stream. It’s also important, because many of the changes that might boost those earnings require the agreement of these companies before they can happen. I already know that the pay out for one stream fluctuates slightly every month but lets say that, for one particular month, Spotify pays $0.0065 per play. If a song is for example 1 minute will they get paid the amount of 2 streams or only 1 stream. Do you feel it would have it’s place as a long term solution? This, plus the #BrokenRecord campaign being built by fellow British musician Tom Gray (of Gomez, but also the boards of PRS for Music and the Ivors Academy) show that for all the positive industry figures, many musicians still see a big problem with streaming, but also potential to solve it. Use promo code QMBMRYN‎ to save 7.5% off on It is only an estimate. This is something we’ve been writing about for several years, and although it’s far from a panacea for musicians’ complaints, it does deserve further investigation. What about other alternatives, like the ones using the blockchain technology to link directly the user to the artist? When Spotify was a scrappy startup providing a much needed revenue stream to the music industry, labels were temporarily willing to accept lower streaming rates. 4. That’s 229 million more than were doing it at the end of 2016. Spotify will point to the amount it’s investing in its platform (more than €1.8bn on research and development between 2015 and 2019 alone according to its financial results, plus another €2.6bn on sales and marketing). It’s been talking about the idea since 2017, and last September it announced its desire to run a pilot by early 2020. Very late to the party here. It can be tough, particularly when you’re not yet at the level of having a team to delegate any of this to. In recent years there has been an outcry from many artists claiming they are not getting paid enough for streaming music on Spotify. Like Apple, Google closely guards GPM’s … The labels literally charge users on Spotify et all for the access to their content just being there, otherwise there is no explanation as to why 5% of my suscription would go to Drake, I’m paying for the access to it, even though I never listen to it. In the US, the Copyright Royalties Board sets the percentage that on-demand streaming services pay out in mechanical royalties to publishers (and thus songwriters), and those were due to rise from 10.5% of a service’s revenues to 15.1% by 2022. However, as we've argued above, the per-stream payout will hugely depend on the type of streams the artist gets. Not to mention the challenges of providing the expected content and access, and/or navigating the ‘asking for money’ requirements of tips-economy success? But if you are a member of their partner program Soundcloud premier you will get a limited opportunity to earn. They take 15% + Fees (ex: Paypal) from the artists I represent. To triple its payouts, it would either have to triple the percentage of its revenues that it pays out (to, er, 195%) or triple the size of the royalties pool itself. Really interesting concept. As we said, we’ve structured it as questions, because this article isn’t pretending to provide a set of neat answers. Subscription streaming – Netflix plus various other services – are winning out with consumers over paying a la carte for digital downloads or video on demand. You can either type in how many streams your song has or you can use the slider to estimate how much your song will earn you on Spotify, Apple Music, or Tidal. Apologies yes, it starts at 15% for digital music and 10% for merch, then the digital music share drops to 10% “as soon as you reach $5,000 USD in sales (and stays there, provided you’ve made at least $5,000 in the past 12 months)” according to Bandcamp –, You haven’t talked about the most obvious solution: Spotify needs other revenue streams. You can either type in how many streams your song has or you can use the slider to estimate how much your song will earn you on Spotify, Apple Music, or Tidal. This may not sound like much, but when you … Earlier this week, we covered the IFPI’s latest figures for global recorded music revenues, which grew by 8.2% in 2019. thought it could generate more revenue with a pricing model other than unlimited streaming for a flat monthly fee, it has every financial incentive to do so. The contrast between these fears and the rosy industry figures is sharpened now, during the Covid-19 pandemic, with the live music industry having shut down entirely in many countries, with an anticipated hit to public performance royalties to come. Brazil, which accounted for the second-most number of streams, had a per-stream payout of $0.0062. We need more studies and, even better, actual commercial trials of the new model to understand how significant its impact would be. ... Sign up; Log in; Toggle navigation. © 2020 tunemunk, This website uses cookies. As shown by Information is Beautiful’s updated-for-2015 visualization of the subject, signed artists make .0019 cents per stream on Pandora and .0011 cents per Spotify stream. Spotify is all the music you’ll ever need. Spotify pays up to $0.00437 per stream to the artists. However, the global management of copyright is woefully antiquated. The user centric model seems to be the fairer way to go, however I’m not holding my breath for record labels agreeing to it. C. It’s all about the pool – and how it’s divided. @ Will Buckley – if Spotify (or Apple Music, etc.) Spotify does not disclose how much it pays artists per stream, but analysts have calculated it at about $0.00318, meaning that a rights holder would receive $3.18 (£2.74) per … 5. What will persuade them? (2) We’ve seen the same thing happen in video. In the past, Spotify’s senior executives have tended to push back on this idea, but there was a small but significant shift in CEO Daniel Ek’s tone when asked about it last week during Spotify’s latest quarterly earnings call: he hinted that based on its tests in a few countries, Spotify is open to the idea “when the economy improves”. How much does Spotify pay per stream? Spotify claims that it currently pays an artist about $0.00348 per stream on a song. Step outside that row though. The latest average for 2019 is $.00437 per stream. Spotify’s pay per stream varies in different countries and regions, but the average is $0.004 per stream. It varies based on several factors as outlined earlier. Could Spotify’s latest move help? It’s just not fair at the moment. Let’s crack on with it. Should Spotify pay more per stream? Apart from being forced to listen in shuffle-only mode, the free version of the app does not allow you to skip any more than six tracks within an hour. If we make them the engine of a new music economy, there’ll be implications, and that’s something that needs – stop us if you’ve heard this one before – a lot more discussion. User-centric wouldn’t be a sudden cure for the royalties unrest, then. (For example, artist-rights blog The Trichordist publishes a really useful annual chart based on figures from a mid-sized independent label – its 2019 figure for Spotify was $0.00348 per stream). Meanwhile, Apple Music pays artists up to $0.00735 on a single stream, which is much higher compared to Spotify. Spotify’s payout for artists depends on which country/continent the plays are coming from and if the user is premium or free. Here are the two challenges. Why shouldn’t that be part of the streaming ecosystem too, whether it’s monthly artist-focused micro-subs on top of the baseline subscription, tips economies based around video livestreams and fan communities, or something else? In its developed markets, Spotify has not raised the price of its standard subscription since it launched in 2008, even though some other digital services (Netflix is the frequent comparison) have done, without obviously suffering from customer rage. This means that it offers one dollar for a total of 229 streams. She starred in over 100 episodes of the legal drama Suits, where she was paid £40,463 ($50,000) per episode - according to, towards the end of her acting career. Spotify doesn’t pay out $0.00348 per stream, so it can’t suddenly decide to triple that to $0.01044. Could streaming services do something truly meaningful here? You can turn that into a per-stream rate, as an artist, by dividing your royalties by your number of streams. Persuading more people to pay for music streaming subscriptions is a priority for the Indian music industry. Bleak, but true. But if you’re calling for user-centric payouts as a solution for the royalties issue, you’ll need to come with some good ideas to cut through the industry politics. Also Read | How Much Does Spotify Pay Per Stream? It’s not a new complaint, but it might just be coming to a head soon in a battle where Spotify is just a bystander – it certainly won’t want to be the referee. Why would labels give that up? Alongside the ‘$9.99 is too cheap’ discussion, though, there’s also still the chance to experiment with even cheaper subscriptions – often limited by catalogue, features and/or how many devices listeners can use – to bring even more of those billions of free listeners in to the paid music world. A couple other data points also suggest that unlimited streaming for one price is here to stay: (1) We’ve seen flat rate streaming subscriptions eclipse digital downloads in the music marketplace with both of them available, and with digital downloads of course having a head start. There are some sensible questions to be asked about how wisely Spotify spends its money, and also some blunt realities around the company’s value not just being in the music, but the technology it has invested in around it. So while revenue is an important metric, it’s not a proxy for the health of the industry. I feel like I’m working for you here. Spotify’s conversion rate is actually pretty good: 45.5% of its listeners are on Spotify Premium, although that includes people on half-price student plans, and also members of family plans. But there’s also a backlash from some musicians who see it as a tacit admission by Spotify that its royalties are paltry, and an insulting device to push the responsibility onto fans. They and their teams are mastering mailing lists; serving their superfans; figuring out social marketing; being smarter with their merchandise; exploring new models like livestreaming; using tech and services to make sure their metadata is accurate and their royalties are collected; making clever use of the ‘on-platform’ creative and marketing tools of the streaming services… they’re taking control of their businesses and hustling to make the most of the current systems and structures. Yes, user-centric would redistribute some royalties from the biggest tracks and artists to those in the mid and long tail of the streaming catalogues. After all, isn’t the current “pro-rata” system something that the services had to agree on in order for the labels to license the content? These models can work brilliantly for some creators, but not all. This site is not affiliated with or part of Spotify. What would it mean, for example, if a label was getting both a smaller share of the overall streaming royalties, and paying out a bigger share of what it does get to its artists? This week, musician Tim Burgess (of the Charlatans, who’s also behind the excellent #TimsTwitterListeningParty co-listening movement) addressed Spotify directly on Twitter, suggesting that “we should look at how much you give to artists… It’s just not fair at the moment”. (Guy Fletcher, OBE: Former Chairman of PRS for music and co-founder NIM). We use our own and third party cookies. Although I’m not the first to mention it, for years artists have been advocating to end the unlimited free streaming service that has played a major role in Spotify’s dominance in the market. However despite large overhead costs, the Swedish … Some of these issues are hard to solve retrospectively without expensive lawyers – if you have a terrible label deal, your streaming royalties will be terrible – but are easier to swerve now and in the future. Fortunately, there are no such restrictions when you have a Spotify subscription. It’s been happening naturally, of course, as Spotify’s revenues have grown every year, but for the purposes of this debate, we’re talking about other ways to increase it. The pilot would be in just one country, France, and only with labels, not publishers or collecting societies. Artist rights group the Future of Music Coalition made an important point when it shared our story on Twitter: Remember, changes in gross revenues for any one income stream doesn’t tell you anything about distribution or about how individual workers (like musicians or songwriters) are faring. Spotify prefers a combination of aggressive discount promotions of the three-months-for-a-dollar variety, plus – and it’s very keen on this argument – the cumulative effect of all its clever features (see: that R&D budget) that means the longer people are on Spotify, the more likely they are to pay. By continuing to use this website you are giving consent to cookies being used. You can expect to make between $3 and $5 per 1,000 streams on Spotify. This is a positive point. The truth? It’s not a reason to give up on the idea, yet. This is the key question to focus on: how Spotify can increase the size of its royalties pool. “Stop saying it’s price-sensitive; Kids pay £8 for a skin in Fortnite and we can’t ask for £12.50 for the entirety of all recorded music? Music Ally Ltd., Holborn Studios, These and other arguments about how streaming royalties are divided aren’t happening in a vacuum either. Which means that even if you never play Drake’s music, he’s getting 5% of your subscription. ... 2020. At the same time, labels (and label alternatives) are making their cases for their share of the revenue, and the good ones are proving their value. If Drake gets 5% of the streams, his rightsholders get 5% of the royalties. Meanwhile, outside the recorded sector, publishers are also seeing their revenues grow, while collecting societies are regularly breaking their records for payouts. Streaming royalties aren’t a single can of worms: they’re a mega chain of WormCanMart supermarkets having an annual worm-can opening festival. If you continue browsing we consider you accept the use of cookies. This was one of the lowest amounts paid by companies. Napster - $0.0167 Tidal - $0.0110 The calculations required are complicated, but perfectly manageable for streaming services. Zooming out: the IFPI says there were 341 million people using paid subscriptions at the end of 2019. There are no official payout rates so we have researched various sources and have come up with a good general estimate per stream. NIM has developed a unique economic ecosystem giving copyright owners the means to sustain and build their careers while getting properly paid to do so. For a Spotify or Apple Music to bolt on its own version of Patreon and Twitch is hardly a simple tweak. I really think we should look at how much you give to artists. This is why the debate about streaming royalties often gets boiled down to ‘Spotify should pay artists more’ – from petitions calling for the company to triple its payouts “immediately” to articles suggesting that ‘Spotify’s ‘tip jar’ is a slap in the face for musicians. We’ve used ‘Spotify’ throughout to reflect its lightning rod status, but almost always you can read that as ‘streaming services’. But could the company up its payout rate from 65%? Comparing Spotify With Other Streaming Services. More than 50,000 artists are using Spotify’s new ‘Artist Fundraising Pick‘ feature, which enables them to raise money from fans for themselves and their teams, or for charities. Still, in western developed countries, the $9.99 figure may be under pressure – to rise. The problem being, as with any alternative to a mainstream service, that it needs a network effect to happe for it to grow enough… Which is the hard part. Are video streaming companies fairer to copyright owners? For a stream to be counted, a user has to listen to a song for at least 30 seconds. That number has slightly fallen to $0.0125. Artists will need around 217,752 total streams to earn $1,472. Resulting in “More money, faster – to copyright owners…” In fact up to 45% more and 26 million times faster! That’s a question that will be answered through the collective efforts of music companies, streaming services, artists and fans alike. Instead, it has a royalties pool (often described as 70% of its revenues, although it’s closer to 65%) that it pays out based on the share of streams on its service. Industry gossip varies on which major label(s) are the reason for the delay, but it’s a blunt, bleak illustration of the difficulties in store for user-centric. 49-50 Eagle Wharf Rd, London, N1 7ED, It’s true. Give me a break,” he said. However, under a user-centric model, the royalties from your monthly payment would only go to the tracks that you listened to. These music streaming services falsely believe that it is their success. Spoiler: Spotify is never going to announce that it’s now paying 195% of its revenues out in royalties, however many people sign that petition. Use our calculation tool to estimate how much you’ll earn from your streams. Spotify’s market cap says that investors via the public equity market *think* that it will generate meaningful profits in the future, but history (especially the early 2000’s) is littered with companies that went out of business just a few years after having equity market caps suggesting that they’d one day be highly profitable.