It’s official: Spotify pays out $0.007 per stream
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 a hitherto unforeseen 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, the platform argues that this figure adds up 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 annually for 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 ‘nice 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.
Source: Music Week
