Why Is Spotify Paying Artists So Little Today?

Music streaming services have become an integral part of our lives. Today it is very difficult to imagine the modern world without them. Over 80% of music is now streaming. This has become especially relevant in recent years, when the music world has faced restrictions and the inability to hold live meetings and concerts in front of its audience.

With the advent of Coronavirus and a reclusive world in a whirlwind of social isolation, it was necessary to use art to escape this pandemic reality, with digital platforms becoming protagonists for both the consumer and singers as the pandemic had already left them without concert revenue.

Music streaming services have become the main source of income for many people in the music industry. And so the question of which streaming service and how much pays artists has become very important for each of them.

That is why demonstrations of musicians and industry professionals around the world have become more frequent, declaring the concentration of payments on the user, and not on the platform. As well as looking to increase the price of each “game” to $0.01.

Recently, Spotify has been the subject of a series of questions from users and musicians for hosting podcasts with negative ideas on its platform. Aside from a perfectly valid complaint in times of a pandemic, another criticism the service has received for years is that it doesn’t pay artists well.

According to the survey data, Spotify currently pays $0.00437 per stream, which is the lowest amount among competitors in the market.

In this scenario, the artist needs to receive 1,000 streams to reach the $1 value. In addition to low remuneration, it is worth remembering that artists still need their share of the money pie with record companies – which usually take most of the amount generated by performances. Criticism of Spotify’s monetization model is outdated and intensified with the pandemic, when artists had to stop performing due to social isolation.

For all the criticism and an alleged $2 billion financial loss due to the Rogan scandal, Spotify doesn’t seem to be interested in messing around with its profitable machine.

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For comparison, here are the amounts paid by music streaming services to artists:

1 Spotify: $0.00437

2 Hot flashes: $0.01284

3. Napster: $0.019

4. Apple Music: $0.00783

5. Dеeser: $0.0064

6. Amazon Music: $0.00402

7 Pandora: $0.00133

Payouts depend on many factors. In particular, it takes into account how many times and in which country a particular song was streamed. The fact is that the cost of streaming services can differ markedly in different countries, depending on the average level of solvency of the population. For example, in India, the cost of a premium Spotify subscription is ten times lower than in the United States and fifteen times lower than in the Netherlands.

The percentage of paid and free users who listened to the composition is also taken into account. And at the end of each financial period (usually a quarter), the founders of the streaming platform decide on the percentage of profits that will be paid to the artists in the form of royalties.

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