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Tuesday, December 3, 2013

How Much Does Spotify Pay Musicians? Now We Really Know

Posted By on Tue, Dec 3, 2013 at 12:13 PM

Spotify's graph of album earnings in July 2013 versus earnings when the service reaches 40 million paying subscribers.
  • Spotify's graph of album earnings in July 2013 versus earnings when the service reaches 40 million paying subscribers.

In a move aimed at quelling criticism from the likes of Thom Yorke, David Byrne, David Lowery, and many other musicians, Spotify today launched a new website that gives specific figures on what the streaming service pays artists.

They are... not high.

The company protests that looking at per-song revenues is a "really flawed way of thinking" about artist pay: "It's not the way we pay or the way our model is built," Mark Williamson, director of artist services, told the UK Guardian. (And indeed, actual Spotify earnings are based on an artist's individual royalty rate, the country in which their music is streamed, the percentage of paid users out of total users, and other factors.) Nonetheless, Spotify reports that the average artist's pay for one streamed track right now is between 0.6 cents and 0.8 cents. In other words, less than one penny.

The new Spotify Artists website also gives specific figures on what certain, nameless albums earned in July 2013. A "niche indie album," whatever that is, earned $3,300. A "breakthrough indie album" earned $76,000. A "global hit album" earned $425,000, according to the site.

Even Spotify acknowledges that this isn't what it hopes to pay artists. In graphs, it contrasts the above figures with what the company says it will pay when it reaches 40 million paying users. Under that scenario, the "niche indie album" would earn $17,000 a month, while a "global hit album" would bring in $2,100,000.

Spotify points to a number of other factors in its defense: That Spotify streams earn more for artists than plays on a "video streaming service" (read: YouTube) or a "radio streaming service" (read: Pandora), or on U.S. terrestrial radio. That the Spotify premium customer spends far more per year ($120 versus $55) than the average paying U.S. listener. That the company has paid out over $1 billion in royalties, including $500 million in 2013 alone.

Of course, nothing Spotify released today will end the debate over its place in the rapidly changing music industry. But at least we now have real, hard numbers to argue with.

[UK Guardian]

-- @iPORT

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Ian S. Port


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