How Many CDs, Downloads, and Streams It Takes to Earn a Spotify Salary…

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Last week, financial filings revealed that the average Spotify employee makes approximately $168,747 a year.  But what would an artist have to sell or stream to meet that number?

This is an update of a famous infographic by Information Is Beautiful from a few years ago.  That was a shocking (and depressing) look at what a modern-day artist needed to make the equivalent of a minimum wage, one that raised serious questions about the ability of artists to make ends meet.

In this scenario, we’ve increased the bar substantially above that mark, and calculated how many CDs, iTunes downloads, or streams would be required to live like a Spotify employee.

Here’s the methodology we employed:

(1) CDs: Assumes a very healthy $10 price for a CD, which is considered generous in this market (at least on a regular basis); approximate $0.50 production, shipping, etc. per unit assumed.

(2) Bandcamp: Using their standard 15% cut. 

(3) Label cuts: these vary and label accounting is frequently opaque; we went with an estimate of about 10% payout on CDs.  On streams, you’re lucky to get anything.  

(4) Spotify streams (copyright 100% controlled): Using an average per-stream royalty rate of $0.004891, based on our analysis of a band with more than 1 million Spotify streams over a three year period.  

(5) Spotify streams for songwriters: based on a per-stream rate of $.00058 as calculated by Trichordist author David Lowery

 

18 Responses

    • Faza (TCM)

      Which is just as well, because you need around 270 million Spotify streams to earn as much as a top-level executive – assuming you own all the rights and are receiving royalties for both the recordings and the songs.

      Reply
  1. mew

    people should really take after the game industry when it comes to online strategy. i can’t even begun to tell you how many games i got just just from watching people play them.

    Reply
  2. Anonymous

    Start a streaming service.

    Only way to make money from streaming.

    Reply
  3. Remi Swierczek

    The artist has to be major caliber “live” to receive that amount from Spoofy!
    I will make $100 bet payable to DMN:
    There was less than 50 (FIFTY) musicians who got $168K from Spoofy in 2015!

    It just confirms ongoing Hunger Games for artists with few IDIOTS at the helm of the music industry going full speed with $200B of perfect fruits to COMPOST made of $15B subs and ads!
    Ek’s business model is a poison KILLING MUSIC with no future for Ek himself!

    Reply
    • Blome

      A resounding heh & meh to your spent and tired nonsensical metaphorical blather. Capital fuh with a double eyeroll.

      Reply
  4. Nicky Knight

    The vital piece of information here isn’t so much about trying to make lot’s of money with Spotify, what it shows us is that iTunes is still he best financially rewarding digital music selling and distribution platform/store in the world. 245,000 singles sold on iTunes will give you a very nice income for the year..

    “Can’t Stop The Feeling” has already sold over 800,000 downloads from iTunes in the US market plus it’s number 1 in iTunes all over the world..

    iTunes is still where the money and the focus is with the business of music.

    Reply
  5. Things that make you go huhmmm...

    With all of the chatter lately concerning EXCLUSIVES (e.g., artist contracts), I wonder how a ‘transfer of copyright ownership” plays in the analysis:

    “A ‘transfer of copyright ownership” is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a non-exclusive license.”

    Title 17 U.S.C. Chapter 2, subsection 101; see also, subsections 201 thru 205.

    Reply
  6. Anonymous

    How much does the average Apple employee make? What about the average UMG exec? Why is this solely about Spotify? What makes them so special that you feel the need to repeatedly mention their salaries and only their salaries?

    Reply
    • Paul Resnikoff

      Sure, we can examine other salaries at other music companies as well. That’s a good idea.

      Reply
  7. dkmstr

    I like the infographic. It gets so pinky when dealing with streaming royalties

    Reply
  8. Nick B

    I’m sure artist can then find other ways to get their music heard by potentially millions of people. If I’m not mistaken, they don’t have to have their music hosted by spotify, correct?

    Reply

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