This is a guest post from Martin Kristiansen, founder of HomeStudioIdeas.com.
Since they started back in 2006, Spotify has become the leading music streaming platform. Because of the relatively low payouts to artists, the giant has received a lot of criticism over the years. Today we will take a look at how much Spotify pays artists, and what you can do to increase your royalty earnings. Let’s dive right in!
Royalties are compensatory payments received by artists, in exchange for the licensed use of their music. Since the rise of music streaming, recordings are licensed by streaming platforms so they can have music on their platform. In return, Spotify pays royalties back to artists every time someone streams their music.
Getting your music licensed by Spotify is a complete chapter in itself, but you as an artist have to work with distributors (or aggregators) to get your music uploaded. They will charge you with a small percentage or a flat fee of your earned royalties.
How much does Spotify pay per stream?
Spotify hasn’t released any official documentation or information regarding their pay per stream, and that’s probably because there are so many factors that come into play. Based on reports, the pay varies. Artists earn an average of $0.004 per stream, ranging from $0.0032 and $0.0054.
To put things into perspective:
- You need approximately 250 streams to earn a dollar
- If you reach 1 million streams, your earnings will be somewhere between $3,200-$5,400
So how does Spotify compare to other music streaming services? Let’s have a look!
- Apple Music: $0.00563
- Google Play Music: $0.00551
- Amazon Music Unlimited: $0.01196
Spotify’s average pay per stream is lower than both Apple Music, Google Play Music, and Amazon Music Unlimited.
So the average pay per stream is somewhere between $0.0032 and $0.0054. How can it differ so much? It depends on where the stream comes from. Your earnings from Spotify depend heavily on if the stream comes from a paying subscriber or a user with a free subscription. Even the location of the user has a major impact. Countries with a lot of free users generate a lower average per stream compared to countries with a lot of paying subscribers.
How artists can increase their earnings on Spotify
If you want to increase your average pay per stream on Spotify you should promote your music to countries with a lot of paying subscribers. Countries like Denmark, Norway, and United Kingdom have a significantly higher pay per stream, compared to countries like India, Brazil, and Argentina.
This probably goes without saying, but releasing a lot of music on the platform will give you more streams which also will increase your earnings (although not your average pay per stream).
If you’re an artist, you can also choose to distribute your music by yourself. Labels and distribution services take a pretty huge chunk from your royalties. It requires a lot of effort, but indie artists have the ability to collect the entire streaming revenue from their own tracks.
Why Spotify still is important
The low pay per stream aside, you should still have your music on Spotify. As of today, Spotify is the biggest streaming platform with 158 million premium subscribers and 190 million free users. They own 34% of the overall music streaming market, beating both Apple Music, Youtube, and Pandora (worldwide).
Uploading your music to Spotify gives you the potential to reach millions of new fans. Spotify is a great platform to promote your music. Getting your music featured on popular playlists is one of the most important methods of music promotion.
Martin Kristiansen is the founder of HomeStudioIdeas.com. He writes about music gear and production tips.