Along with the rapid development of music streaming services, their role as a source of income for artists has simultaneously increased significantly. This source has become especially relevant during the global pandemic and the absence of concerts, when almost the entire music industry has moved online.
Statistics say that today, every four out of five dollars earned in the music business is generated in one way or another by music streaming platforms. And these numbers are making artists take their tracks on the music streaming services very seriously.
The Swedish platform Spotify is, of course, the most attractive of all the offerings. This is not surprising, since it is Spotify today, as in previous years, that is the leader in the global music industry, with a market share of about 40%.
But how do you calculate your profit on Spotify? After all, it is very difficult for an artist to independently understand how much he can earn on this platform and calculate his income.
To do this, there is a royalty calculator specially developed by the service, with the help of which an artist can approximately calculate his dividends from music streaming.
To calculate, you need to take only two steps:
- Enter data on the number of flows of a particular river for a period of one month.
- Perform the calculation by clicking on the appropriate button.
It would seem that everything is very simple. But in fact, this is not so.
First, you need to understand that the service takes into account only those streams when the track broadcast lasted at least 30 seconds. This rule applies to all music streaming services.
Secondly, Spotify does not pay royalties directly to the artist. The main payment goes to the copyright holder, who receives from 60 to 80 percent of the profits. Usually an artist receives no more than 20% of the profits from the streams of his track. The main profit will go to the record company, with the help of which the artist places his composition on the streaming platform.
You can become an independent artist and self-host and promote your compositions. But in this case, all the worries about the promotion of the track fall solely on the independent artist.
To understand the big picture, let’s take a concrete example. For 437,000 plays on Spotify, the royalty will be $1,000. The record company gets $700 out of that thousand. And already from this amount he pays a fee to the artist in the amount of about $ 140, taking about $ 560 for himself.