How much money Spotify pays artists to stream is a question many artists who have chosen to tie their careers to streaming music want to know.
And there is nothing surprising in this matter, because in 2022, four out of five dollars in the music industry are generated by music streaming services. And the Swedish Spotify is the leader of the global music streaming market, owning about 36% of its assets. That is, every third stream in the world belongs to Spotify, which thus becomes a trendsetter in the music industry.
In recent years, we have heard of various streaming apps where artists earn money for every reproduction we receive on our profile. The explanation of how to make money from our reproductions seems simple as the formulas are simple: post a lot of music and ask for our music to be featured on official Spotify playlists in order to reach more people. But not everything is so simple.
Let’s find out how much Spotify pays per stream. Let’s start with some important facts you should know about how Spotify pays. We should know that Spotify hasn’t provided an official figure, on average it usually pays between $0.003 and $0.005 per play. This means that we need about 250 plays to earn a dollar. This may not be entirely true, they may be more or less reproductions depending on various factors.
It wasn’t always like this: Spotify’s payment rates have changed over time. In 2014, they paid an average of $0.00521, but two years later, the average rate dropped to $0.00437. By 2022, the median wage rate has dropped again to around $0.00397.
A key factor in determining how Spotify distributes streaming revenue is the type of account that the user who plays your songs has, whether it be a paid user or a user who enjoys their music for free.
And there is no doubt that Spotify, in particular, is positioning itself as a giant in the music industry. Despite mentioning that Spotify is the most popular and powerful, the leading brand in streaming is not the platform that pays the best. This brings us to the question, “Is it really worth uploading our music to Spotify?”
But all the benefits of a Swedish music streaming service are relative. Firstly, artists do not see transparency in business relationships. Secondly, the amount of royalties is very variable, since it depends on many factors that do not always depend on the artist himself, and most often do not depend on him at all.
We have to take into account several factors that affect how much money we receive for each transfer in the streaming giant. How they are:
1. The country where our listeners live
2. If they have a premium Spotify account
3. What is their distribution contract?
Let’s not forget that Spotify is one of the few platforms operating under the FREEM business model. This means that it allows all users to listen to music with ads for free or pay for a membership and enjoy music without ads.
Spotify can be viewed from several points of view as a source of income:
1. Recording royalty revenue: These revenues come from online playback, in the case of a recording, these revenues are given to the digital music distributor that the artist works with.
2. Streaming revenue paid to the composer, lyricist, producer, engineer and publisher of each song through copyright management organizations.
So, Spotify continues to be one of the most interesting sources of income for artists and its popularity is not decreasing, but on the contrary, it is constantly increasing.