Breaking down our streaming royalties payout list for 2019, Spotify doesn’t exactly have the best per-stream rates. But according to CEO Daniel Ek, it’s enough for tens of thousands of artists to support themselves.
For the third year in a row, Napster ranked as the ‘king’ of streaming music payouts. On average, the Rhapsody-owned service pays out $0.019 per stream. To meet the monthly minimum wage amount in the US, an indie artist would need 77,474 total plays.
TIDAL came next with a reported $0.01284 per stream, followed by Apple Music, Google Play Music, and Deezer.
Spotify, unfortunately, continues to rank as the service with one of the worst per-stream rates. The streaming music giant now reportedly pays $0.00437 per play, slightly ahead of Amazon and way ahead of YouTube. Artists would need around 336,842 total plays on Spotify to earn $1,472.
But, according to CEO Daniel Ek, those plays are more than enough for musicians to make a living.
Yes, artists can live on just $0.00437 per stream.
In a new podcast interview, Spotify’s CEO made several remarkable comments.
Acknowledging the company’s gatekeeper role, Ek shared a different goal for artists.
“Today the primary tool that an artist has to get heard on Spotify besides putting the music on there is getting known by one of our editors.
“So the question is: Can we develop tools that enable artists to promote their music more efficiently just by themselves on the platform?”
When asked whether streaming now offers a “sustainable future” for artists, Ek implied all that artists now have a legitimate future on streaming.
Explaining that Spotify has created a “more fair and equal music industry” than ever before, Ek stated,
“Because the costs [of CDs] were fairly high for a person buying the music, you ended up going with what you knew and wouldn’t take that much risk on unknown artists.”
Thus, since paid streaming only charges a monthly fee, users can listen and discover all the music they’d like.
“So in the world with streaming, what’s really interesting is the alternative cost for you to listen to something new is virtually zero. It’s just your time.”
This, he continued, leads to more opportunities for artists.
“And because of that, you do listen to a lot more music than you did before and you listen to a bigger diversity of artists than you did before which in turn then grows the music industry.”
Despite not knowing the number of artists that Spotify ‘supports,’ Ek confidently stated that the figure is ‘far greater’ than in the CD era. That pegs the number substantially north of 30,000 for Spotify alone, according to Ek’s estimations.
“I don’t know what the number is now but it’s far greater. Even on Spotify itself, it’s far greater than that.“
Believing the company will eventually emerge as the “R&D arm” of the music industry, Ek added,
“[We believe] we can develop better tools and technology to allow [the industry] to be more efficient and thereby creating more, better solutions for them and for artists.”
Explaining the company’s shift toward podcasts, he stated the medium has resonated well.
“[Our recent podcast acquisitions] played really well into our strategy of ubiquity – i.e., being on all of these different devices in your home, whether it’s the Alexas or TV screens, or in your cars or whatever as just another source where you could play your audio.”
Keep in mind that the streaming music giant remains embroiled in multiple feuds across the industry.
First, the service has appealed a recent Copyright Royalty Board increase for songwriters – the first in 110 years. Second, the company rolled out its service in India, offering Warner/Chappell’s catalog without locking down a proper agreement with Warner Music Group. Third, in an increasingly bitter feud, Spotify has called Apple a monopolist.
Ek cleverly shied away from these topics.
Praising the service’s per-stream rates, Ek point to the extreme limitations of the earlier, CD-based industry.
“Back in 2000, 2001, at the very, very peak of the music industry, peak of CD… there were about 20- to maybe 30,000 artists that could live on being recorded music artists.
“Why? Well, because, again, the distribution costs so much, which ended up being that there’s very few artists that could even get distributed to begin with.
“[Because] the costs were fairly high for a person buying the music, you ended up going with what you knew and wouldn’t take that much risk on unknown artists.”
Speaking about the service’s recent Hulu ad campaign, claiming artists can now earn enough money on Spotify, David Lowery remarked,
“Try living on $0.0038 a stream and then get back to me.”
Lowery posted that figure based on his own sources.
Ignoring the music service’s poor payouts, Ek shared his vision for Spotify’s future.
“I believed that the problem for the music industry with the past had been just that fact that it always felt like it was people who wanted to disrupt the existing music industry.
“I don’t believe that the music industry has to be disrupted… it has to be evolved. So we like to work with them as partners.”
Just don’t tell that to the growing list of songwriters who feel defrauded by the service. As well as Warner/Chappell. And, Apple.
Featured image by Rasmus Andersson (CC by 2.0).