Spotify is becoming increasingly more popular in the United States, and with millions of free, streaming songs, the user base is sure to multiply.
Since its 2008 launch in Sweden by Daniel Ek and Martin Lorentzen, Spotify is now used by 35% of the Swedish population. It can now be described as an endless CD library, somewhat of a dream to most music buffs. But with all the talk of ‘no gimmicks, no trial-period, no catches,’ is anyone wondering how much Spotify is paying artists for these song plays?
How Spotify Pays Out Artists
Much of Spotify’s revenue comes from advertising and subscription-paid services. According to an earnings release by Spotify in 2010, about 70% of revenue is derived from paid subscriptions and 30% from advertising.
So just how much are artists getting paid for each song of theirs played? In recent times, there has been controversy over royalties from digital-music services. Lady Gaga is one of the first artists to receive media attention when stories emerged about her Spotify earnings; $162 for 1 million streams. According to some though, this is now an urban legend.
In contrast, some artists such as Brian Aglira or Joe Marchetti from Duel Piano Bar in Philadelphia claim they have no knowledge of receiving royalties from Spotify. Instead they are focusing on their ‘original’ and live music career.
Another issue in question is if Spotify is being fair to its artists. Websites such asSpotiDj are doing their own research to answer the query. According to SpotiDj, current payment per stream is $ 0.0052 (about % 0.0042). Payout is based on monthly revenue as well as the number of streams.
What about other free-streaming sites?
On Pandora’s company blog, statistics were given for artist income. As one of the most popular radio streamers in the world, they have the highest payout by-far for music artists.
Top-earners such as Adele, Coldplay and Wiz Khalifa are each steadily approaching the $1 million dollar mark for income. With such fast growing internet-radio platforms, local artists may feel positive effects.
With legal purchases of songs and paid subscriptions, the power of digital-music is already proving its place in the music world. The overall impact on artists will have positive effects if the population continues using services like Spotify and Pandora at the rate they have been.
Government-mandated royalties for a non-interactive webcasts ensures that artists receive the same pay as they would from any other internet-radio company.
Remember, supporting artists in person at interactive, audience driven shows is still the best way to pick up on the latest music and feels much more rewarding for musicians.