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How Much is Spotify Paying Artists? [EPISODE #01]

If you’re wondering if you should put your music on Spotify, you’re definitely in the right place. We, at M|!D, have experience using the platform for our work, and based off of those experiences, we want to give you perspective on if it’s worth putting your music on Spotify.

In simpler times, say 20 or more years ago, purchasing music was very easy. After hearing the latest single by your favorite artist on the radio or at a party, you’d visit your local record store to purchase the record. If all goes right, with the support of a record store and record label, the musician will get a percentage of every purchase. What used to be a streamlined process has now turned blurry due to music streaming services, such as Spotify.

Spotify allows its users to “Create the perfect playlist.” It is also a great tool to discover musicians – independent and commercial - worldwide. But what is a convenience to the average music lover, is sometimes an inconvenience to the artist.

Are you going to make money on Spotify?

Based on our research, the truth is, you will make money, but not as much as you think. The more streams you get, the less money you receive. Spotify pays out 70% of their revenues, averaging about 67%. According to an infographic by David McCandless, a data journalist and information designer, an artist on Spotify would need over four million streams per month to earn $1,160 (USD)/yr. Music Journalist, Luke Lewis wrote that "the 'free' aspect of Spotify is unsustainable" and that "if Spotify is to have a future, it needs to be a viable business."

Solution : If you have an issue with the low royalty rates on streaming services like Spotify you can always opt out and sale digital copies of your record for download on services like iTunes and Bandcamp. These services do take a percentage of the sale but the little financial gain you might be set out for could surely trump your income gained from streaming royalties.

Are you going to get exposure?

In the past, a musician mostly relied on live performances, selling music out of their car trunks, or if they were lucky, a radio insider or DJ would share his or her music to the masses. However, with tools like Spotify, promotion is in your hands. We found that a positive aspect of Spotify is that along with social media, it’s a great tool for exposure. Spotify has artist features and featured playlists that help the music lover find an artist or genre relatively easy. Also, Spotify has a handsome Facebook Integration, check it out:

Why are people taking their music off of Spotify?

Another pro of Spotify is its free tier option, which is Spotify’s biggest user base compared to their paid subscribers. According to Wikipedia, as of June 2015, Spotify had more than 75 million active users. The number of paid subscribers reached 30 million in March 2016. Having exposure to Spotify's millions of customers gives you greater chances of maximum exposure.

However, Spotify's free tier brings issues for many popular or independent musicians. Many of them believed that only paid subscribers should have access to exclusive content. The says "this trend dates back to 2011 when Adele’s 21 was kept her music off of Spotify because the service wouldn’t accommodate her request for the project to be available exclusively to paying subscribers. In 2013, Beyoncé passed on putting her eponymous album on the platform, and Coldplay followed up in 2014, keeping Ghost Stories off Spotify — and all other streaming services — for four months. Arguably the biggest blow came when Taylor Swift pulled her entire catalog from the service."

To sum up our findings, you should never look at Spotify as the enemy. If you want to make more money on your music, use services such as iTunes. If you want maximum exposure, use Spotify as a marketing and promotional tool for your music. Remember these outlets are just tools that you ultimately have to use to best maximize your efforts.

If you want to know more about the pros and cons of putting your music on Spotify, be sure to watch our video. Please comment below and share your experience with Spotify.







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