Elon Musk is suddenly getting a close-up look at what artists are getting paid by Spotify — as well as other streaming platforms.
Artists have been screaming about this for years. Maybe even a decade. Now, Elon Musk is blasting Spotify for its ‘crazy low payouts’ to artists, especially his new girlfriend, Grimes.
After sifting through a few of Grimes’ royalty statements, Musk expressed shock at how little artists are making. In the case of Grimes, a giant chunk of the royalties are paid through a label, with a contractually-agreed portion paid to the artist.
In a Twitter exchange, Musk was asked whether it’s better to stream or purchase music from artists. In response, the Tesla founder displayed this streaming royalty breakdown from Statista, which demonstrates the the “crazy low payout” received by labels, with “the artists only [receiving] a small fraction of these numbers”.
Of course, Spotify is just one part of this low-paying picture.
But Spotify is the third-worst among a seriously low-paying group, with per-stream royalties averaging $0.00397 according to Statista’s research. That’s a tiny fraction of a penny, which of course requires absolutely immense stream counts to produce anything tangible.
In other words, you have to ‘make it up in volume’. But virtually no artists can amass enough plays to accrue a substantive, recurring payout from Spotify.
Tellingly, a successful artist like Grimes is probably receiving only a modest paycheck from Spotify, despite being planted on numerous high-profile playlists. And payouts from YouTube and Pandora are even worse. All of which is sad, because Grimes is one of the most celebrated artists of the past ten years, with Pitchfork even declaring ‘Oblivion’ to be the best song of the decade.
But despite that acclaim, Grimes is nowhere near the spin volumes of a superstar like Beyonce or Taylor Swift. In fact, we heard a rumor at Musexpo recently that just 15 artists on Spotify account for 85% of all the royalties dispersed. Sounds unbelievable, until we found out that ratio is even more lopsided on Pandora.
All of that starts to look extremely exploitative when juxtaposed against extremely luxurious Spotify offices, a billionaire co-founder Daniel Ek, and more than $1 billion in share cash-outs by the likes of Warner Music Group and Sony Music Entertainment (though in fairness, both labels have pledged to redistribute some of that money to its sub-labels and artists).
Statista sourced its information from The Trichordist, a leading advocate for artists’ rights in the streaming era. Part of that advocacy involves exposing royalty statements from actual artists, something streaming providers have always refused to disclose.
Suddenly, it looks like Elon Musk’s romance with Grimes is more than just celebrity fodder.
For years, Tesla has been rumored to be pondering its own streaming music service. But up until now, Musk’s complaints have largely revolved around issues like user interface and the clumsiness of current dashboard solutions. Now, that outlook also includes the payout picture to artists, a newfound perspective that could change the way Tesla finally enters the music game.