It's official: Spotify pays out $0.007 per stream

Tim Ingham
It's official: Spotify pays out $0.007 per stream

The idea that Spotify isn't transparent with artists' earnings has finally taken a slight clobbering this morning - with the streaming platform shining new light on its royalty payouts.

As part of a new site specificially built for artists, the company reveals that it has recently paid out an average of $0.006 and $0.0084 per stream to rightsholders.

That figure is presumably a mix of streams on its premium service (thought to be around $0.01 per stream) and its ad-supported free service.

However, Spotify argues that this figure adds up over time to a significant degree for artists. Its research suggests that the average 'US music listener' pays $25 per year on music - a figure that increases to $41 per year for the average Spotify user across both its free and premium tiers.

Spotify reiterates on its new Spotify For Artists site that it keeps 30% of revenues, with 70% paid back to rightsholders.

Although this money tends to be paid to record labels - who then take their cut - before it reaches managers and artists, Spotify happily promotes digital distributors like CD Baby, which offer artists a 95% cut of their royalites.

Other revelations on the new site include:

  • Anonymous royalty payout figures from July 2013, which show a month's streams of five specific albums. These include $3,300 (in the month) for a "niche indie album", $76,000 for a 'breakthrough indie album' to $425,000 for a "global hit album".

  • In the last 12 months Spotify has paid out more than $3 million to this top-earning 'global hit album' artist. By this time next year it expects to be paying out over $6 million annually to this artist 'and other artists of similar size'. This particular artist is not the most played artist on Spotify in 2013, either - there are other artists who have been paid out more than $3m in 2013 alone.

  • Adjusted predicitive figures for these albums if Spotify hit 40m paying subscribers worldwide. The 'niche indie album' would accrue $17,000, the 'breakthrough indie album would draw $380,000 and the 'global hit album' $2.1m. Spotify has currently announced 6m premium subscribers, with around 24m ad-supported free users.

  • According to Spotify, its average royalty payouts of between $6,000 and $8,400 per million listens compare favourably to figures of $3,000 for a "video streaming service" (aka YouTube) and $1,300 – $1,500 for a "radio streaming service" (aka Pandora).

  • Spotify has paid out more than $500m to rightsholders in 2013, and more than $1bn in total since its launch in 2008.


Tags: spotify

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