Despite Record Revenues, Spotify’s Payouts to Artists and Labels Continue to Decline

No matter what the company claims, you shouldn’t expect to make a living off of Spotify.  Or even pay next month’s rent.

Earlier this year, Digital Music News touched on an important topic.

According to a report published by Audiam, as Spotify’s revenue climbed over the year, artist and label royalty payouts declined.

Songs streamed on the company’s ad-supported tier this year earned $0.00014123 in mechanicals per play.  So, an artist would earn $100 in mechanical royalties after 703,581 streams.  This number actually decreased from $0.00022288 in December 2016.

For the premium tier, Spotify paid $0.00066481 per stream.  So, an artist would earn just $100 after 150,419 streams.  While that sounds great at first, that number has dropped substantially since January 2014.

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Image by Audiam.

The reproduction rights organization, founded by Jeff Price and recently purchased by SOCAN, published the following statement almost poetically.

“The impact on the artists, songwriters, labels and music publishers is a bizarre, unexpected anti-intuitive equation that seems to subscribe to Newton’s third law of physics: ‘For every action, there is an equal and opposite reaction.’

“In this case, as more money is made from the music, music creators and copyright holders are making less.”

Payouts for other streaming licenses have also dropped, based on available data.  Of course, the streaming music service has remained nefariously quiet on the topic.  Separately, Spotify CEO Daniel Ek has expressed an eventual goal to help artists become self-sufficient.

Now, two artists have shared their royalty payouts.  And, yes.  Spotify continues to pay less in royalties.  And, no.  There’s probably nothing you can do about it.

6 years of declining streaming payouts.

Last April, award-winning cellist and composer Zoe Keating shared what she made from streaming platforms in 2017.

Using RouteNote as her distributor, Keating earned the most from Amazon Prime Music.  At a per-stream rate of $0.0663649, she earned $1.265.38 from 19,067 streams.

TIDAL paid $0.0162451 per play, netting Keating $354.42 after 21,817 streams.  At a per-stream rate of $0.0048416 per stream, she earned $99.06 from Deezer after 20,460 streams.

How about Spotify?  Well, ranking as one of the worst streaming payout offenders, the company paid her $4,388.93 after 1,154,513 plays.  Spotify paid $0.0038015 per stream.

Things didn’t get better for Keating when using CD Baby as her distributor.  At a slightly higher rate of $0.0039 per stream, she earned just $5,654.58 after 1,449,887 streams.

Now, five months later, Keating has shared her findings once more, this time focusing on just her Spotify plays in the past six years.

In 2013, the award-winning cellist and composer earned a cool $1,174.35 after 416,112 streams.  Using CD Baby as her distributor, Spotify paid her $0.0028222 per stream.  Prior to her distributor’s cut, Keating had earned $1,290.49 at a per-stream rate of $0.0031013.

A year later, Spotify’s per-stream rate actually rose to $0.040689.  After 712,039 plays, Keating earned $2,897.18.  At a per-stream rate of $0.0044713 before CD Baby’s 9% cut, she had earned $3,183.71.

2014 marked the last time Spotify’s per-stream rate went that high.

In 2015, Keating earned $4,821.07 for 1,487,584 streams.  Spotify had paid her $0.0032409 per stream.  Prior to CD Baby’s cut, she had earned $5,297.88 at a per-stream rate of $0.0035614.

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(Click to enlarge.)

In 2016, Zoe Keating decided to add a second distributor.

Using RouteNote as her distributor, Spotify paid her $2,214.53 after 606,748 plays at a per-stream rate of $0.0038015.  Keating didn’t write how much RouteNote kept.

Using CD Baby, she earned $7,800 from 1,952,933 plays at a per-stream rate of $0.0039940.  Keating earned $8,571.43 at a per-stream rate of $0.0043890 before CD Baby’s 9% cut.

Though Spotify’s revenue grew in 2017, its royalty rates remained stagnant.

As noted earlier, Spotify paid her at a per-stream rate of $0.0038015 through RouteNote, and $0.0039 through CD Baby.

So, with Spotify’s successful IPO in 2018 as well as exponential revenue growth, the company now pays more, right?

Not really.

Using RouteNote as her distributor, Keating earned $2,657.25 after 707,891 plays at a per-stream rate of $0.0037538.  At a per-stream rate of $0.0035298, she earned $3,254.82 after 922,092 plays using CD Baby.  Prior to CD Baby’s 9% cut, she had earned $3,576.73 at a per-stream rate of $0.0038789.

In total, after 6 years on Spotify, Keating earned just $34,862.71 after 9,409,799 plays at an average per-stream rate of $0.0037049.

Keating’s not alone, unfortunately.

Country singer Jason Kirkness also shared his Spotify payouts.

After 337,245 plays, he earned $747.25.  He reportedly earned just $0.0022 per stream.

Unfortunately, don’t expect the company to acknowledge these numbers nor explain the ridiculously low payouts.

Yet, artists and labels have one small consolation.  At least they earn more on Spotify than they would on YouTube, which pays just $0.00074 per stream.

 


If you’re an artist and would love to share your streaming payouts, feel free to send them to news@digitalmusicnews.com.  We’ll share them – confidentially if needed – to the music industry community.

Featured image by aisletwentytwo (CC by 2.0).

10 Responses

  1. Anonymous

    I’d love to see the trend of what their revenue pool, number of plays on their service, and total payable royalties has been over the time period shown above. I suspect that would paint a very different picture than looking at the per-play rates alone. The per-play rate is a red herring, and doesn’t tell the whole story.

  2. so

    Broken record, but volume, not individual rate, is the whole ballgame. Second, there’s no need to pay 9% to CD Baby for delivery. That model is dying.

    • BubbaT

      It’s not simple to change distributors. Each service removes albums and re-uploads from the new distributor. Depending on how well this is handled an album can disappear for days or weeks and lose reviews, playlists, ratings, etc. She probably has a legacy recording on CDBaby and chose RouteNote going forward. They don’t take a percentage.

  3. Stop lying.

    Idiotic metric.
    If you want to maximize stream rate then you minimize engagement and amount of tracks that a given subscriber listens to.
    Is it really that hard to see that per stream pay rate is not a metric that matters anymore?

    Spotify and other services are paying more money out every year as they grow, stop lying to people.

    • Blobbo

      Stop bootlicking a broken industry of ripoff MBAs. Why Spotify got to be the arbiter of all music is beyond me. Each country should have its own company at the very least, and there should be a national rate set after studies are done about the costs of running the business.

      That some bald Swedish prick and dinosaur major label MBAs get to decide everything is ludicrous.

  4. Tenn Tux

    Ridiculous false claim: “payouts” make reference to overall yield but the evidence presented is per play rates (calculated after the fact). It is a lie.

    Reminder: Spotify is a fixed pool of revenue. With fixed pools, growing listenership brings lower rates per play but higher yields overall, which is occurring despite the falsehood advanced here.

    Example: As a TV show becomes popular, it is paid less per viewer but earns more money overall. Likewise radio or Spotify play or other broadcast media.

    Example: Southwest charges less per seat but earns more annually. Win-win.

    Best example: Telephone rates per minute/per call fall as telecom industry grows dramatically. Good business.

    Self-serving: Source is Audiam, a business is focused on mechanicals. Anti-Spotify, anti-MMA (lobbied against it earning not a single vote of agreement), because the old system’s weaknesses are Audiam profits.

    Hello MMA! Goodbye, Audiam! (Unless, of course, you are auditing direct deals you might do.)

    • Placeholder

      Explain me, what part of the shared spreadsheet is false?