If you are an artist, you may be wondering how much Spotify pays per stream. The truth is that the platform does not pay artists directly for each stream. Instead, it pays based on subscription revenue. The amount Spotify pays each artist or rights-holder varies greatly. But in general, it pays more than the average streaming service.
Spotify's Pay Per Stream System isn't Good for Artists
The pay per stream model has become a common way for Spotify to promote artists' music. This model encourages artists to accept lower payouts in exchange for more prominence on the platform. In essence, this model is akin to payola, a controversial and illegal practice that was widely practiced in the early 2000s to boost radio play. Spotify has declined to comment on this issue.
It Doesn't Pay Artists Directly
Spotify executives have responded to allegations that it does not pay artists directly. The CEO of the streaming service, Daniel Ek, has said that those artists complaining about poor digital streaming revenue are not trying hard enough. He added that in order to survive, they need to constantly produce new music. The company is now introducing an in-app fundraising system for artists, which links to CashApp, PayPal, and GoFundMe.
It Doesn't Pay Rights-Holders Directly
Spotify does not pay the rights-holders directly for their music, although they do receive a share of the revenue. The royalties Spotify pays depend on the amount of spotify plays, which can vary from song to song. These payments are small, and are generally unfavorable for lesser-known artists.
It Pays Based on Subscription Revenue
Spotify pays musicians a royalty rate based on the number of spotify plays they receive, which varies according to the artist. In general, an artist will receive $3 to $5 per 1,000 streams. However, the amount paid to an artist varies depending on country. For example, in Norway, Iceland and Switzerland, the artist will receive $6 per thousand streams. It's unclear whether Spotify plans to change its payment model in the future.
It Pays Based on Geography
The amount of money that Spotify pays per stream is different in different countries. Spotify has a pro-rata model of paying artists based on their geographic location. The number of subscribers will also affect the amount of money that an artist earns per stream. The average amount paid per stream is about $0.003 per listener. However, this rate can fluctuate considerably.
It Pays Based on Retention
In contrast to other freemium products, Spotify has a surprisingly high conversion rate. Out of its 75 million monthly users, 20% become paying subscribers. That's a very high conversion rate for a freemium product, and more than half use the service more than a few times per week.
It Pays Based on ARPU
Spotify pays based on ARPU, which reflects its average revenue per user. This figure fluctuates based on user engagement. For example, if a customer streams one song a month, the per-stream rate will be around $5. In the long run, this number is likely to decrease.