How Much Do I Get Paid For a Spotify Streams?
Many people ask us about payouts and why we won't disclose the precise algorithm that calculates the pay per stream ratio. This is simply due to the fact that we, as distributors, serve as a go-between for artists and DSPs (such as Spotify, Apple Music, etc.). We don't compute or choose how royalties are generated because the DSPs provide the royalties we pay out directly.
Following complaints from the artist community that Spotify lacks clarity over how stream royalties are handled, the company has launched "Loud & Clear," an interactive website that explains how payouts are handled.
“Artists deserve clarity about the economics of music streaming. This site aims to increase transparency by sharing new data on the global streaming economy and breaking down the royalty system, the players, and the process.” - Spotify
Here is a video from the website that makes clear how musicians and artists are paid:
Additionally, the website contains an interactive part that details the number of artists who are meeting the various revenue levels that Spotify uses for payouts. These calculations of the various thresholds are displayed through graphs. The website establishes a baseline with these thresholds that are equivalent to your own streaming statistics, even though it withholds the precise amount an artist will be paid per stream.
“If you look at those graphs of how artists of different earning thresholds have grown over the past four years, what you clearly see is that Spotify has invested in a more engaging consumer experience: Having better programming, launching in new countries, all the things we do to invest in our business—they grow the pie for everybody,” VP, Head of Marketplace at Spotify, Charlie Hellman said.
“We’re constantly testing to see what is the revenue-maximizing price for [any given] market, because if we can find the revenue-maximizing price, that’s best for Spotify and it’s best for all artists. When we grow our revenues, artists’ revenues grow. When we make our programming better, more artists can fit in and have a chance to grow an audience.”
Hopefully, this will clear the air between creators and streaming services — creating a more trusting space between artists, distributors, and DSPs. We all share the same ambition. Like Daniel Ek said: “Our goal is to help musicians that aspire to be, or are professional to make a living.”