Despite the fact that Spotify today is in the first place in the world in terms of popularity among streaming music services, it is notorious for the lack of transparency in how it pays its artists. Contrary to popular belief, payments to artists are not as simple as counting the number of streams of a particular musical composition.
Payments to Spotify artists are influenced by several factors that determine its variability. This is the level of subscription of listeners and the country of listening to content, the number of streams of a certain composition, net advertising income and distribution agreements. Independent services pay for each play a percentage tied to the average monthly cost of advertisements in the country where the track was played.
Since Spotify has many nuances, there is no exact formula for how many performers can receive royalties for listening. In addition, most of what we know about royalty payments to Spotify executors is data consolidated by third-party companies, and not by the Swedish streaming service itself.
In 2020, iGroove Music reported that Spotify payments for one million streams ranged from $850 in Argentina to $5479 in Norway. This discrepancy is probably due to differences in subscription rates in different countries. Spotify Premium can cost from $1.60 in developing countries such as India, or up to $15.65 in more developed countries such as Denmark.
Spotify’s average payout rates are also steadily declining over time.
But payments to artists, despite the opaque conditions, are still carried out. Their periodicity is different, but the minimum period is one month. It is this period that the vast majority of royalty payments to artists have.
A separate agreement can provide for the payment of royalties with a different discreteness. For example, you can sign an agreement to pay compensation to a certain artist once a quarter, once a half year, and even once a year.