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).
Mr. Ek comes from a Torrent background which tells you a lot about his concern for the musicians many of whom now live in extreme squalor thanks to his company!
HE IS A MUSIC INDUSTRY AND MUSICIANS rapist with little element pretending that he is Jesus CHRIST of music business!
A NOBODY killing together with Google Apple & Amazon (exactly in that order)
$300B (billion) dollars of music goodwill obvious to BORAT.
Labels and mega stars (bribed by PIGS listed above) have to UNITE & start REVOLUTION inside of Google’s guarded music CONCENTRATION CAMP.
Buy points.
Spend points on streaming videos, streaming audio, live streaming, more.
Bands get paid.
People didn’t all of a sudden decide that they didn’t want to pay bands any more. Labels stopped trying to get money. Do downloads really need to cost 99 cents? We all know that it costs basically nothing to send that file. But they stopped selling files before they thought that maybe it might be better to try cutting the price?
Isn’t it Verizon, ATT, Sprint, TMobile and everyone else that makes out big from streaming? They charge a lot for unlimited bandwidth, and if they try to get everyone streaming on their phones, everyone is buying bandwidth that they might not ordinarily want. So, you might buy Spotify, or use Spotify for free, but the wireless providers are getting paid even if Spotify isn’t. Those wireless companies really like the idea of selling everyone in a family an unlimited plan for $40 a month, if there are 5 people, or something. They’re getting over a hundred a month from people or families. Money that could be spent on concert tickets. Maybe they can just sell downloads cheaply. We know that it’s a costly process to make a vinyl record, and people spend money because they know that there is money spent there. With a download, you just click a button, and the bits shoot to you. There is some electical costs there, and some internet provider needs paid, but basically sending a file is close to free. Why 99 cents? why not 29 cents? It’s better than 3/10th of 1 cent for every stream. You download a song for 29 cents, is it likely or not likely that you’ll listen to that song 100 times? My math might not be right there, but maybe it’s 50 times, depending on who gets what. It’s much more likely that someone is not going to listen to that song that many times.
Record companies never realized that when they were charging $10 or more for a CD, that people were getting a CD, but when they took away the CD and replaced it with bits, people weren’t really getting any physical thing that should definitely cost money. The record companies didn’t say “our distribution costs are pretty much zero now, we can cut our prices”. They seemed to say “we like $10”.
Throw them all in jail
Hi, me and my band (7 people total) just got our music on Spotify! Should I put in my 2 weeks now or just leave my job and never come back?
Reports indicate that even the lowest paid artists are bringing in more than DMN
now thats just nasty.
Why the crazy numbers being used?
Artists would need around 336,842 total plays on Spotify to earn $1,472.
why not $1000? why $1472?
I know it has something to do with minimum wage, but you’ve done that minimum wage thing before. And people do not think in increments of $1472. $1000 is good. Minimum wage is different in different states, as well. And you don’t really make it clear if it’s BY MONTH?
Artists would need around 336,842 total plays on Spotify to earn $1,472. And minimum wage, what, assuming a 40 hour work week? And this is $1,472 a month, I guess? I got 7.25 x 2000 divided by 12, and $1208.
Your figures would be more useful if they don’t require additional math to make sense of.
As the guy who started the whole “let’s compare streams to minimum wage” thing way back when (look it up, if you don’t believe me) I can try to explain my thinking in choosing the Federal minimum wage (that has since gone up, incidentally) as the baseline. Here goes:
In economics we often talk about “opportunity cost” – which is your next best alternative to what you are presently doing. If your best alternative is better than what you’re doing right now, then you should probably go do that instead – so (the thinking goes) an economic activity has to pay better than the next best alternative, or people will choose to pursue the alternative instead.
So, what’s the next best alternative for an aspiring recording artist? Worst-case scenario: get a crappy job, that will pay your rent, at least. The Federal minimum wage is a good estimate of what such a crappy, full-time job might pay. At the very least, it is a legally-mandated minimum, so it offers the most favourable terms of comparison for various ways of monetizing recordings (the more you can conceivably earn in a day job, the more you’d have to earn from recordings for them to be your best alternative).
My original comparison wasn’t so much Spotify against Federal minimum wage (I didn’t have data for Spotify at the time – 2010), but instead – various forms of monetizing recordings (from self-pressed CDs sold at gigs, to various forms of streaming), as compared to minimum wage. Nine years ago things looked bad for streaming, and they haven’t improved since – nor are likely to ever improve.
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.
*************
It depends on how many streams there are.
I’m a musician who is making a living off of the streaming services. You’ve never heard of me.
This article is a bunch of fucking bullshit. Bunch of clickbait hate fake news.
I’m sorry nobody likes your shitty band. Please try harder.
There’s a lot of us out here who are doing just fine with streaming. I’ve never made more money in the industry, and I’ve been in it a long time.
Same here ^
They never interview those of us who weren’t around in the vinyl or CD era, but whose lives have been transformed by the streaming era.
Why are propagandists like Daniel Sanchez still complaining about the per stream rate? Nobody is listening on Napster or Tidal, so it doesn’t matter what the per stream rate is there.
I had over 820,000 streams on Spotify has month. Growing every month. Do the math. When I count up the numbers everywhere else, I am earning about $100,000 a year now. I’m not in the charts. I don’t even play live.
Who do they always run to for scare quotes? David Lowery. Fuck him. Fucking lazy journalists with their agendas.
Congrats! So, if you’re getting 820k plays in one month and if that equals 9,840,000 a year and if you’re making over $100k (US?) a year (let’s say $110k, ok?), you’re getting over 1 cent per play! Again, congrats! How are you getting 2.5 more per play than average (or about 10 times more than I get)? Does one get paid more as the plays increase? Please share your knowledge.
Jim, 820,000 streams on Spotify in a month is about $3000 in streaming royalties based on the average $0.00365 per stream I earned in February. Add mechanical and publishing royalties several months or a year later and I’m around $3600. Spotify constitutes about 40% of my streaming earnings with all other services picking up the rest, but the lion’s share is Google Play, Pandora, Amazon, and Apple. File downloads are an additional small percentage. Check your math. I prepay the IRS about $6500 every quarter.
Nice comment. Angry, sarcastic, insulting. Nice. How about you try to make your point without sounding like a jerk?
That’s directed at BAC.
OK, who are you?
Send me an email and I’ll profile you. Just be prepared to back your claims.
[email protected]
“Be prepared to back up your claims.”
That’s funny.
You know why musicians don’t share their details with you people in the media? Because you’re untrustworthy. You have this chip on your shoulder about streaming, about streaming rates, about Spotify, and about Daniel Ek. I can look through your past articles. Every one I’ve read is disparaging.
You think any musician wants to reveal how much they’re earning? That opens up a Pandora’s Box of jealousy and envy. Anybody you ever had to kick out of your band for being a drunk or druggie will come out of the woodwork to slag you. Exes stalking around waiting to talk shit. Old friends calling you up asking for $200. Who needs the headaches?
I’m not rich but I can pay my bills, have insurance, and have a car that’s not 25 years old and broken down. Best of all, I don’t have to work a fucking day job! I don’t have to wash dishes, prep food, load in or out events, be a cashier, or work at Guitar Center. Fuck that!
Sorry I don’t long for the days before Spotify and the other streaming services when I had to do all that shit, plus play shitty gigs that barely paid, print up CDs and merch that no one would buy, and constantly deal with talentless assholes who were never going anywhere. I don’t know why DMN longs for those days.
A lot of artists have shared their detailed royalty statements with us. Spotify, or any other streaming service, however, has refused to do that.
Doesn’t sound like transparency to me.
Anyone can make a claim: you, Daniel Ek, the President. Can you verify that claim?
$.00437 per play? I wish. My net average via CDBaby (most aggregators take a cut I suppose) is $.00107 to $.00208? How do I get those big bucks? Lol!!
Ek has never cared about musicians – way more concerned about the IPO and luxurious offices.