Photo Credit: Deepak Choudary
How much of your $120/year Spotify Premium subscription fee goes to artists? A new Spotify Unwrapped tool can help you find out.
On Friday, the Union of Musicians and Allied Workers tweeted an interesting tool. “You paid Spotify $120 this year if you had a premium subscription,” the tweet begins. “Guess how much of that went to the artists you love? Guess how much of that went to the executives, shareholders, and artists you didn’t even interact with?”
The UMAW included a link to a ‘Spotify Unwrapped’ tool that seeks to answer those questions. I was curious, as a fairly new Spotify subscriber. I used Google Play Music from its inception in 2014 until 2019, when I decided to bail before it shut down. This is my first full year as a Spotify Premium subscriber. How much of that $120 subscription fee went to the artists I listened to?
Spotify’s API says I listened to 30,163 minutes of music in 2020. That’s about 503 hours of music listening for the year, rounding up slightly. That means I averaged around an hour and a half of music listening per day in 2020. Yet, only $35.17 (29.17%) of my yearly Spotify Premium cost went to support the artists I streamed in 2020.
That averages out to be around $0.0038 per stream to artists in my Spotify Unwrapped this year.
This new Spotify Unwrapped tool shines a light on how poor artists’ royalties are from music streaming.
Spotify’s royalty rate is always changing because it’s dependent on several factors. Your region and whether your account is ad-supported or Premium are just two factors. Artists who have more Spotify Premium fans will receive higher payouts than those who are supported primarily by free users.
The tool serves to highlight – at a personal level – how little of the subscription price goes to artists. Lizzo, Eminem, and Nicki Minaj dominated my Spotify Unwrapped 2020 this year – but they earned less than $0.0038 per stream of my listening. Despite providing an average hour and a half of enjoyment per day – the artists received less than 30% of the fee collected.
Artists’ royalty rates appear to be on a downward trend, too. An analysis just two years ago in 2018 estimated that Spotify’s average royalty rate to artists was $0.0054. That number has dropped significantly in just two years; imagine what it will be in 2025.
The takeaway is pretty obvious. While Spotify sees rising subscriber accounts and record revenues, the artists supporting the platform see pennies.
How more misleading can you be with this article? Have some integrity. If you want to say the artist got less than 30% be honest about where the rest went. Because you know it didn’t go into Spotify’s pockets. And how dare you throw a little estimate of Spotify revenue this year without showing their expenses to provide the platform where your artists can be heard. What did Universal earn this year vs their expenses? How about ASCAP? When are people going to grow up and start following the money. The misinformation and miseducation around streaming is getting worse and worse, it’s embarrassing.
That’s really another entire article. Spotify would argue that a disproportionate percentage of its revenues goes to label groups for recording (and publishing) royalties. Daniel Ek argues that this demonstrates just how much Spotify is paying in royalties, despite low (and dropping) per-stream royalties.
This is the biggest pile of horseshit that I think I’ve ever seen. Where did you get estimated Spotify profits of $2.3 billion?? Spotify is on track to LOSE money this year.
Not sure where you got your royalty calculation either. Spotify pays out more than half of its revenue to artists, and the rest goes to the costs of running the company (things like credit card transaction fees, marketing, cost of bandwidth to stream all that music, R&D, etc.). They’re a public company – you can see all this for yourself if you take the time.
The $2.3 billion figure is from Union of Musicians and Allied Workers and part of their tool. So they can best answer how they got to that figure, I’m guessing their are calculating this based on capital that is heavily reinvested, used for overhead and executive salaries, etc. (you are correct that Spotify is not a profitable company).
So in summary: don’t shoot the messenger.
Spotify is an technology company, not a collections society. They develop a media player and a music discovery platform. What is the value of a stream, and what overheads are involved in delivering that stream, and is that s viable model for artists to subscribe to. These are the real questions to be asked, and I feel a lot fo journalists are cherry picking figures without looking at the wider context of what spotify actually is. It’s low hanging fruit. Artists need to be savvier about what they sign themselves away to and subscribe to what makes sense to their own business model instead of leaning on entitlement
When some guy spends an afternoon in his bedroom shouting over a drum loop and calls this music (which costs almost nothing), this is radically different from a band that spends months at Abbey Road studios spending thousands and thousands of dollars recording songs with an orchestra or a choir with a Producer and an Arranger but these ‘songs’ both cost the same amount of money???? People getting music for free just does not work for Professional musicians 60% of whom have now quit the Hobbyist music business! And who is going to spend $30,000 on adding an orchestra to a track (which makes such a HUGE difference to the quality of music) when nobody wants to reimburse these costs?
Pennies for play would replace subscription services.
What is PENNIES FOR PLAY and how does it work. This is a fair streaming rate system for all who have online music or more.
First no company taking a cut as large as Spotify, Pandora, iTunes, etc.; second, no ads needed ever so no data mining mess.
Next you pay like a credit card. You pay for $10 dollars worth of clicks, then access any artistic content under the system, music, art, writing, videos , film, news, blogs etc. Doesn’t have to limit to music.
The company that collects pays out to the musician when he reaches say $50 with a check. it’s pay per view, but on a very small scale. With small fees for processing, not large chunks for company profits.
Let’s say artists got together and decided to do this on their own, even simpler. For a fee you post your song. Then consumer buys say an amount of $10 . When he clicks on a song he pays a penny of his ten dollars. The end of the month each artist gets a penny for every click he had. He again probably has to reach an amount of $50 or so before they send a check or you would have to send out checks for pennies.
The only major costs are granting credits to customers, tallying clicks, and paying the musician.
Positives include , no big company owned, no ads ever, no monthly subscription fees ever, no big costs for customer,or musician, very low bureaucracy, and all musicians on a fair playing field, so quality counts more than promotion money. Those are a lot of pluses.
You would be in the same situation soon. Who hosts all? Who makes the organisation, gets the money and pay royalties and labels? OK, that person would keep a take of the pennies to cover costs. And since they would not make all that for free, they would have another take for their legitimate profit.
So if they were 100% subsidized and every penny of the $120 was passed to 1 DIY artist what’s the $ then. Assume you want to make $100K per year. Using some of the above numbers rounded up/down. 30,000 minutes/ 3.5 min per song = 8600 songs listened to give or take. So we take our $120 and divide by 8600 songs which gives us $0.0139… per song. We take our $100K we want to earn and divide by 0.0139 = 7.2 million plays or 600,000 per month assuming no taxes or anyone else getting a penny. How many here would be making $100K a year with my unicorn math?
Great conversation here in all of the comments! @Ashley @ Paul – have you looked into Trubify yet? I got an ad in my IG feed yesterday with an image of a bar graph that claims “artists can earn 10x more than any other platform” and shows (I’m guessing) avg. payout rates ‘per live view’. I haven’t looked into the details so I can’t say anything positive or negative on it yet, but, it certainly caught my attention with the graphic they chose comparing themselves to Soundcloud, Spotify, Deezer and YouTube.
While I too quibbly with the numbers, great tool.
My “money” shot “Red Velvet Sunlight Project Apink TWICE Gregory Esayan
Is their music worth more than 6 cents per hour?”
techcrunch “Overall revenues for the quarter (spring 20) hit $2 billion (€1.9 billion), up 24 percent on a year ago with a gross margin of 25.6 percent.”
But a “petition” is worthless.
Everyone who has issues with a web aggregator taking most of an artists revenue should look no farther than the latest “stimulus” bill and our government’s priorities.
Paul has been attacking Spotify with misleading articles for years. Would love to see more attention on the predatory practices of labels though. Not sure why they seem to get a pass.
Why would any musician defend Spotify?
We all know Daniel Ek couldn’t care a less about musicians. From the very beginning its always been about the IPO and having literally the most lavish office space possible.
Not sure. Kind of disappointed at all the people defending Spotify’s poor royalties. I could throw $35 at each of my top five and be happy. Apparently artists shouldn’t get paid, according to these comments.
Then go ahead and buy your artists music and stop streaming them. In the meantime, if you’re upset about low per stream rates, follow the money like a real journalist and be the first ever on DMN to report the real companies taking advantage of artists. It’s certainly not the platform throwing out 75% of their revenues. Your shirt you’re wearing right now has a 60-80% profit margin. Spotify has a 20-25% margin. Where’s the money going if not to the artists then? Be brave enough to report the truth.
The question of the micropennies-on-the-dollar to artists problem is deep, and may well be beyond DMN. You could take each artist, and depending on their bargaining power, NDA’s, expenses, tax rate, company and country culture, and find wildly divergent numbers, and wildly divergent levels of satisfaction.
Let’s just say that, among other things, artists are younger than and donate far less to the political class than do the extractive layers above them. And get similar results.
My I is @eddiebpeno my email is [email protected]
Please let’s talk I have info
You would be in the same situation soon. Who hosts all? Who makes the organisation, gets the money and pay royalties and labels? OK, that person would keep a take of the pennies to cover costs. And since they would not make all that for free, they would have another take for their legitimate profit.
Weird. I actually tried that tool spotify unwrapped and got very interesting results. I listened 30.000 minutes this year, a little bit less that you. I have a free account. Do you know how much my artists got paid?
Spoiler alert: much more than yours.
Concretely 129 dollars.
I repeat : I use the free account, ads based, which is supposed to pay less pro stream. However, the pay pro stream was exactly the same, 0.0038.
Something doesn’t add here. As a silly question, who coded that app, unwrapped?