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Let’s take a closer look at how much artists earn every time you press ‘play’ on Spotify.
Spotify is a key revenue source for many artists, making its payment policy crucial for supporting your favorite musicians.
However, with different factors influencing the numbers, calculating Spotify’s actual payout per stream can be confusing.
That’s why we researched more than a hundred testimonials from artists in and out of the US to determine how much artists earn on Spotify. Let’s dive in!
How Much Does Spotify Pay per Stream?
Spotify hasn’t officially revealed its per-stream rate, but our research combining more than a hundred testimonials from different artists found that Spotify is averaging a payout of $0.0032 per stream.
However, this average rate may not be fully accurate, as Spotify states they use a streamshare payment model. They divide monthly profits by total plays and pay artists based on that figure.
Additionally, Spotify doesn’t pay artists directly. They pay track rights holders, who then compensate their artists.
How Are Spotify’s Streaming Payouts Calculated?
Streaming platforms usually have a fixed payout rate per stream multiplied by the stream count. So, if we use Spotify’s $0.0032 per stream rate, an album with 1,500,000 streams should earn $4,800.
On the other hand, with Spotify’s streamshare model, the payout per stream will depend on the monthly profits and total streams in a specific country. For example, if a track accounts for one in every 1,000 streams from Italy in June, the rights holders get 1/1000 of Spotify Italy’s June profits.
Royalties are paid monthly by Spotify. However, the timing and amount artists receive depend on their contract with rights holders. Indie artists usually keep all profits, while major labels take a cut for expenses like advertising and distribution.
Factors Affecting Spotify’s Streaming Payouts
While there are many variables involved, streaming payouts to artists depend primarily on the local market and user type. Here’s a quick look at each:
Free vs. Premium streams
User type affects artist earnings per stream, with payouts varying across streaming platforms due to different subscription models. On platforms like Spotify and Deezer, which offer free and premium plans, average payouts come from both subscriptions and ad revenue.
For context, a 2017 study reported Spotify’s Average Revenue Per User (ARPU) for premium subscribers at $4.81, versus $0.51 for free streams. That said, even with equal streams, premium users contribute more revenue than free users.
Local streaming markets
Market conditions influence streaming payouts globally.
For example, a Spotify Premium subscription costs $10.99/month in the U.S. but roughly $3.99 in a smaller market like Indonesia. In this case, Spotify reduced its prices to compete with local services like Joox, which charges only $1.50/month.
Apple Music and YouTube Music have similarly adjusted their pricing, leading to smaller per-stream payouts for artists.
Spotify takes a fee for boosting songs via Discovery Mode. While exact rates are undisclosed, some artists say they pay up to $0.50 per user click. This tool allows artists to select songs for paid inclusion in Spotify’s personalized playlist algorithm, boosting visibility and potential earnings.
The fee can be high relative to average streaming rates. And with no guaranteed results, it’s a risky investment for artists unsure of its value.
How Much Do Other Music Streaming Platforms Pay per Stream?
The table below shows artist earnings per stream and the number of streams needed to earn $1,000 on the different music streaming platforms.
|Pay per stream
|Streams to get $1,000
How do other music streaming platforms calculate streaming payouts?
Streaming services use various methods to determine royalties, leading to diverse payouts per stream. Here are the average rates for other major platforms:
- Apple Music: The company pays about $0.01 per stream, one of the highest rates among platforms. However, this doesn’t directly reach artists. Like other platforms, Apple Music uses a pro-rated model, giving 52% of its ad revenue to labels indiscriminately.
- Deezer: Deezer’s “Pay who you play” system directs subscriber payments solely to the artists they listen to, although payout rates vary by location and subscription type.
- Amazon Music: Artists usually earn $0.004 per play, but Prime Music accounts pay less—around $0.00139 per stream. Artists can earn more by selling music on Amazon’s Digital Music Store, where Amazon takes a 30% cut.
- Pandora: According to David Crosby, Pandora pays only $0.0013 per stream. However, royalty recipients vary by stream tier. Artists receive ad-supported stream payments via SoundExchange, while record labels get subscription-based royalties.
- YouTube Music: The platform pays artists $0.008 per stream but its popularity and ad revenue from music videos can boost earnings. YouTube ads pay $7-10 per 1,000 impressions, yet only 30-40% of views are monetized. A music video needs roughly 4,000 views to earn this amount.
- Tidal: Tidal, though less popular, pays artists the most at up to $0.013 per stream, totaling $13,000 per million streams. Tidal’s artist-friendly approach includes Tidal Rising, which offers extra royalties from HiFi Plus tier subscribers based on subscription revenues.
- Qobuz: Qobuz pays artists $0.043 per stream, based on 2018 data, which may be outdated. Notably, Qobuz reduced its share of artist royalties during the pandemic to support smaller artists.
FAQs About Streaming Payouts
- Can artists live off music streaming payouts?
- How can I increase my earnings from streaming platforms?
- Why do so many musicians hate Spotify?
Can artists live off music streaming payouts?
Unless they’re really famous, artists rarely make a living from music streaming, with indie artists particularly affected.
To illustrate, consider a minimum wage of $15 per hour, or $31,200 annually. Earning an annual minimum wage requires 10.4 million Spotify streams, not including expenses and deductions. To put it another way, an artist requires 312,500 streams to earn $1,000 at this rate, not counting fees, so the actual number could be higher.
How can I increase my earnings from streaming platforms?
Artists can enhance streaming revenue by regularly releasing and promoting new music, targeting English-speaking markets for higher per-stream payouts, featuring tracks on popular Spotify playlists, and optimizing their Spotify presence using SEO tactics. This multi-faceted approach helps in growing the fanbase, increasing visibility, and boosting earnings.
Why do so many musicians hate Spotify?
Many musicians criticize Spotify for its perceived inadequate pay-per-stream, arguing it reflects broader industry issues. They also feel compelled to use the platform due to a lack of alternatives and are concerned about working conditions within the streaming industry, all contributing to a general discontent towards Spotify and similar platforms.