Spotify pays artists only $0.004 per stream

In the last decade, many platforms have emerged where you can listen to music, such as Spotify, Apple Music, Tidal, Deezer, YouTube Music, SoundCloud, or Pandora. Spotify is one of the most known in the music industry. Nowadays, many artists make money thanks to these music streaming platforms. Especially now that there are almost no live shows due to the pandemic, these streaming revenues are extra significant. But how much money does an artist actually make on Spotify streams? And how much does Spotify (or Tidal, Apple Music, etc.) pay per stream? Read further to find out.

Streaming platforms are at the center of the music industry. However, while promising local artists will earn not so much through streaming, an international superstar will make a million times as much.

What is Spotify?

Spotify is a digital music streaming service that provides access to millions of songs, podcasts, and videos from artists worldwide. So why do people love it so much?

Its main advantage is that its users can access great content for free just by registering.

Spotify is available in two versions: Spotify Free and Premium; the second option requires paying a monthly subscription fee. The free version has some advantages since it can be accessed from a PC, laptop, and mobile phone, just by clicking. But to enjoy the full service, you need a Premium plan.

How much does Spotify pay per stream?

Let's get straight to the point: how much does an artist actually earn per stream? Well, that's not that easy to figure out. Spotify is very secretive about it.

The company officially establishes a payment of between $0.003 and $0.0084 per stream, with an average payout of $0.004 per stream.

However, it depends on many factors. For example, not every country pays the same amount. In addition, Spotify doesn't pay artists royalties based on streaming rates. The royalty payments that artists receive may vary based on differences in the streaming of their music or the agreements they have with labels or distributors.

There has been a lot of controversy regarding how much Spotify pays for royalties. But first, you have to understand the difference between the Spotify Free and Premium versions.

The first is free to use (as we mentioned earlier) and shows ads to users. The Premium model has no ads but does ask for a monthly fee. These two versions handle music royalties differently, either. Spotify offers better royalties for copyrights when Premium users stream music. In addition, Spotify has an internal policy that the company is the holder of all subscription income for the Premium version. It also owns all of the advertising revenue for Spotify Free.

Less than a cent

With about a third of the streaming market share, the platform pays on the average $0.004 per playback. Thus, it's necessary to reach 250 listeners to earn at least a dollar.

So you have to stream a lot to get something out of it. In addition, it doesn't mean that all the money goes to the artists. They often also have to divide the money: a record label or a manager often wants to earn some profits. So then there's not much left.

There are many factors to consider that affect the money an artist will receive from Spotify and such as where their listeners live, if they have a Premium account or what type of distribution contract the musician in question has.

How much does Spotify pay for copyright?

The content rights owners are paid based on those rates and are subject to the percentage of reproductions that come from free and Premium users. Therefore, the higher the percentage of streams of Premium users, the higher the royalty rate and vice versa.

With its enormous growth of active users, Spotify currently has around 75 million, but approximately only 20 million have a Premium account.

Obviously, the growth of free users is much higher than that of paid users, which dilutes the royalty rate per stream for artists. The more users Spotify acquires, the lower the royalty rate per stream, unless the paid subscription percentage is maintained or increased compared to the free version. Rates are also influenced by the country (due to advertising purchases and the currency's value).

The price of paid subscriptions may also vary due to discounts and package offers.

Spotify pay per stream - 70 percent goes to the right holders

Many artists and music makers aren't happy with Spotify's system. Of all the money Spotify receives, 70 percent goes to the right holders. That money also comes from your subscription. How does that work? All the money is split across all streams. But the system also concerns the share of one artist within all those streams. So let's say Drake is responsible for five percent of all streams, then five percent of all money has to go to Drake.

Is it unfair?

Of course, that's okay if you enjoy listening to Drake. But what if you never do? Then it's actually a bit weird since your money goes to Drake while you never listen to his music. That's why some artists think that you should only pay for the artists you actually stream. And not that everything is lumped together and then distributed.

Music streams - which streaming service pays artists the most?

Do you want to know how much do artists make per stream?

Below we presented a chart where you can see how much music streaming services pay per stream.

Music streaming service	Avg. pay per stream
Spotify	$0.00437
Tidal	$0.01284
Napster	$0.019
Apple Music	$0.00783
Deezer	$0.0064
Amazon Music	$0.00402
Pandora	$0.00133
YouTube	$0.000069

How many streams does it take to make money with Spotify or other platforms? Well, you can learn it using Spotify calculator.

These are the number of streams that musicians need to obtain to earn $1 or $1000.

Therefore, if a musician gets 1,000,000 views on Spotify (where only the biggest can get), his earnings would be $4,366.

Music streaming service	Streams to earn $1	Streams to earn $1000
Spotify	229	229 000
Tidal	80	80 000
Napster	53	53 000
Apple Music	136	136 000
Deezer	156	156 000
Amazon Music	249	249 000
Pandora	751	751 000
YouTube	1,449	1,449,000

Can an artist make a living from Spotify streams?

Spotify doesn't want to say what exactly artists earn because it depends on many factors. However, according to many musicians, artists have to have millions of streams to live from their music.

For example, according to our chart, as an artist, you'll earn:

Thus, a musician needs to have 400k+ streams per month, to earn a living (based on US minimum wage)*

*The current federal minimum wage is $7.25 per hour, but it varies from state to state

Upload your music to all streaming platforms to increase your earnings

If you want to earn as much as possible, don't waste any opportunity to reach new listeners. Use Smart Links to share your music across all streaming services. This innovative option makes sure that your music is across every major platform with just a few clicks. What's more, this feature directs your fans to a nice-looking landing page that allows them to open playlists in their favorite music streaming app. With the Smart Links analytics dashboard, you can learn more about your fans and spread your influence further.

Apple Music pays more

Apple Music was released by Apple Inc. in 2015 and is the first service from Apple that also works on Android. Apple Music currently has about 60 million users, which is still much less than its major competitor Spotify. So would Apple pay the artists more to increase competition? Yes, Apple certainly does this. The artist only needs 136 streams to earn $1.

On the other hand, an artist with Spotify only earns this at 229 streams. It may seem like a slight difference, but if an artist reaches a million streams on both platforms, this saves $1,000, a pretty hefty amount.

YouTube the largest expense

YouTube was founded on February 15, 2005, by Chad Hurley, Steve Chen, and Jawed Karim and since then, as many know, is a successful platform. YouTube is one of the top 3 most visited websites in the world, and about 300,000 new videos are posted every day. It provides a genuine opportunity for artists to release their video clips. But what does such a video clip on YouTube actually earn? An artist makes about $690 with a video clip that is viewed a million times. That amount is, therefore a lot more than that of Spotify and Apple Music.

In short, an artist earns the most from YouTube. However, it should be noted that an artist does not make a video clip for every song. Ultimately, the earnings from streaming services are nil and no longer as significant a cost item as in the past, when people still listened to music through CDs and LPs. Artists currently earn the most from concerts, sponsorship deals, and merchandising.

Tidal and Napster pay the best

The most generous streaming platform is Napster. The online music store pays the artist $1 for every 53 streams, followed by Tidal. Created by Jay-Z, Tidal pays $1 for all 80 streams. Then there is Apple Music (136 streams), Deezer (156 streams), Spotify (229 streams), and Amazon Music (249 streams). Far behind, YouTube Music stands out as the most "stingy" platform since to collect just $1, you have to generate no less than 1,449 streams.

If you are a listener and it's vital for you to support artists, you can start using TIDAL instead of another music streaming platform. For example, if you already have your playlists saved on Spotify or Apple music, you can quickly transfer them using the FreeYourMusic app!

Soundcloud and Deezer want to pay fairly

On 1 st April, SoundCloud implemented the fan-powered royalties, thanks to which indie artists can benefit directly from their fans and subscribers. This money-making system is far more transparent for musicians than royalties options offered by other music streaming services.

Soundcloud will be the first streaming service to pay artists with the money of subscribers who have actually listened to the artist. Other major music services such as Spotify and Apple Music now collect their users' money and often spend the most on the artists with the greatest success. As a user, you actually paid musicians you never listened to. Many unions and artists have been criticizing this system for years. It favors stars and leaves little for the smaller musicians.

That is why Soundcloud on April 1 has launched the fan-powered royalties system. In this model, the user pays only the artists to whom he or she listens. “Artists are now better equipped to grow their careers by forging deeper connections with their most dedicated fans,” said Soundcloud CEO Michael Weissman. "Fans can now directly influence how their favorite artists are paid."

Even though not every artist on SoundCloud will get fan-powered royalties (about a fifth of them enrolled in the new monetization programs), it’s a step in a good direction. Another streaming service that has been pushing for fair pay systems for years is Deezer but they have been struggling to get the major labels to agree to a pilot. It's no surprise that big record companies are likely to oppose the fan-powered system: through the current system, they can make huge profits.

If you'd like to support the artists you actually listen to with your paid subscription, Soundcloud may be your go-to streaming service. Read more about our Soundcloud vs Spotify comparison to see what both services have to offer.

from Hacker News https://ift.tt/3yia7EI