I’m Another Indie Artist. And My Spotify Payouts Have Grown 62.7% In One Year…

It’s still half a penny. But it’s also growing.

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Here’s a breakdown from another indie band, The Layaways, which started tracking their payouts in August, 2009.  There are two comparison timeframes: August, 2009 through March, 2011, and August, 2009 through June, 2012.

I. Spotify per-stream payouts through March, 2011

smallest: $0.0002056

largest: $0.011456

average: $0.002865

II. Spotify per-stream payouts through June, 2012

low: $.0000237253

high: $.011926

average: $.0046623

Difference in 15 months: +$0.0017973

+62.7%

9 Responses

  1. @mattadownes

    What artist?

    How many spins?

    What their music a domestic or international release?

  2. Paradox

    On their Digital Audio Insider blog, it is written as “August 2009 to June 2012, the average is $0.0046623”

    DMN makes it seem like the payout rate for June 2012 is $0.0046623. It is much higher.

    In order for the average to be $0.0046623, the high end (June 2012) has to be higher than the low end (back in 2009).

    Crude example: $0.002 in 2009, $0.007 in 2012. The average from 2009 to 2012 is somewhere in the middle at $0.0046623.

  3. Steven Corn (BFM Digital)

    I think that the focus on micropennies for streams is going to lead us down the wrong path. Obviously, if there were enough streams, the microcents would add up. Production music libraries have dealt with a similar issue for years when they grant an annual usage agreement with various broadcasters. The per use fee would be pennies on the dollar if the music libraries ever calculated it. I know. I was there once and I did the math.

    But the upside was guaranteed revenue and backend royalties. However, certain cable networks started doing direct licensing of the performance royalties. Still, it was some money versus no money. And the saving grace were the big, license fees that the libraries got for uses in movies, trailers, commercials etc.

    That’s very much like today. The streaming revenue for an individual artist may not amount to much. But it’s often offset by the still-strong download sales revenue. The latter has not seen any decline while the streaming revenue/usage are increasing.

    Personally, I’ve done the math and I still don’t see any cannabilization of BFM’s download revenue by streaming usage. To date, it’s all been an upside. However, if the download revenue should drop significantly or disappear, then, of course, we all would be f***ed.

    So the challenge is one of two directions:

    1) convince more music consumers that a $5 or $10/mo fee is really a great value (which it is) and that ubiquitious access to music is worth more than a latte or two per month; or

    2) convince advertisers to pay higher CPM to reach their relevant audience on the streaming services.

    Accomplishing one or the either will protect a revenue flow to the labels and artists. Not doing so will jeopardize it and, quite possibly, relegate recorded music revenue to a complete loss leader for other music-related commerce.

    • HansH

      Spot on! The rate is a result of revenues and number of streams over a certian period. It has been going up and down for over a few years now.

      Average Spotify rates will most like stay about $0.005 for ever!! (Unless the subsciption fees rise and/or people start streaming less, both of which are not very likely. )

      • Casey

        I think the rates will end up around $0.008 to $0.011.

        Spotify will begin the process of restricting free usage in new territories in a matter of time. Once they do that the averages should soar as new people signup and the amount of free listening drops.

  4. QSDC

    We have BARELY scratched the surface of streaming.

    Things won’t take off until cell data rates are cheap enough that some of the major cell providers are willing to add music streaming services as an extra.

    Eventually it will be cheap enough that maybe a company like Sprint add a free, unlimited music streaming service as a competive advantage over the bigger companies like AT&T and Verizon.

    Like it or not, the techies are the ones that determine the fate of the music industry. The musicians and the labels are basically going over Niagra Falls in a barrel. Try to enjoy the ride.

  5. HansH

    This article completely misses the point I’m afraid.

    This example doesn’t show that Spotify payouts have grown!! It tells us that this band has received a higher average rate per stream over the year.

    What does this mean? Nothing at all.

    You can have 100 streams of $0.46623 or 10,000 of $0.002865.

    I would prefer the latter.

    I can’t say this enough. Stop focussing on the rate! It’s pointless. The number of streams is decisive.

    • QSDC

      This is a perfectly reasonable point of view, for a small, independent artist.

      A well-established artist must consider the possibility of sales cannibalization. In order to make up for the cannibalization of iTunes downloads, the streaming payouts need to be as high as possible.