It’s common knowledge that Spotify is one of the biggest players when it comes to music streaming services. It’s smart, pretty inexpensive and has almost any song you can think of. But you may be wondering; ‘how much does it pay artists each time one of their songs is played?‘. With the help of some research, I’m going to answer this question for you.
On average, Spotify pays between $0.00331 and $0.00437 per stream of an audio file on the Spotify mobile, web & desktop apps. This rate is around 50% less than in previous years, meaning that artists are being paid less each year from Spotify.
To learn more about exactly why this is and how Spotify artists generate revenue, keep reading.
Let’s put it into perspective
You’re probably not sure how much the figure I mentioned above equates to in real money right? Don’t worry, I’ve made it more manageable to understand for you by multiplying the average by typical amounts of streams:
1,000 Streams: $3.84
10,000 Streams: $38.40
100,000 Streams: $380.40
1 Million Streams: $3,840
1 Billion Streams: $38,400
10 Billion Streams: $384,000
That’s not how much they earn…
Those numbers aren’t how much Spotify artists actually earn, there are expenses after that amount is paid which have to be taken into account. Spotify artists usually have to pay their record label a percentage of the revenue in addition to taxes and any other lavish-lifestyle expenses incurred in the production of the music.
Basically, it’s very hard to get rich just from Spotify alone these days, artists need to look for other ways of generating an income.
Why is it decreasing?
There’s no doubt that Spotify artists are being paid less than ever, but why exactly is it happening? This is a tricky question to answer, and the truth is that no one but Spotify really knows, but I have a pretty good idea as to the potential reasons:
Spotify wants to increase revenue
This is the obvious one really. By paying artists less, Spotify’s profit margin will increase. For a long time, Spotify didn’t actually make any money when they were trying to grow, so this move is most likely to satisfy investors and increase the company’s value. I don’t blame them really, they are a for-profit at the end of the day.
Over-valuation of the music industry
The music industry has been growing exponentially over the decades and more so in recent years due to the introduction of streaming services like Spotify. Like anything, it can’t go on forever. Advertisers are only willing to pay artists a certain amount until it is no longer profitable for them. For this reason, it is possible that the music industry became over-valued and is no cooling-off and levelling out. It will be interesting to see how pay-per-stream rates on Spotify differ over the coming years as it will help give an insight into this factor.
How to make more money as an artist
After reading this, you may be wondering how artists get rich? Well, the truth is, they usually get income from multiple sources which come together to make a nice stack of money.
Being an influencer kind of comes with the job of being an artist. As soon as an artist gains a bit of a following, people will naturally be interested in their lives and consequently, they will become an influencer. As you may already know, this means $. Companies frequently pay influencers like artists to promote or endorse their products and sometimes pay upwards of $100K for an Instagram post. That’s usually more than they get from Spotify in a whole year. It’s important to note that you have to be careful to disclose that it is an advertisement or you could have the advertising board come knocking on your door.
Performing to a live audience is a great way to make money as a Spotify artist – especially considering that you can sell tickets through the app, meaning that your following has direct and easy access to your tickets. Artists can charge anywhere from $20-$150 per ticket – fill the venue with 10,000 people and you’ve banked $1M before costs.
Using other streaming platforms
Spotify isn’t the only platform for selling music as an artist. With other big names like YouTube Music, Deezer and Apple Music, who all also pay artists per stream, you can double or even triple your streaming income as an artist. There’s no point in just sticking to one (unless you have to due to exclusivity rights).
Pay Per Stream (Compared)
Here’s a great comparison table courtesy of thetrichordist.com which highlights the different rates paid to artists by streaming services:
Here’s an infographic we produced which compares the data in the table above: