How does artist, like Madonna, get paid by Apple Music or Spotify when they play her music? Does she get paid every time we listen to one of her songs?

Question

How does artist, like Madonna, get paid by Apple Music or Spotify when they play her music? Does she get paid every time we listen to one of her songs?

In: 6

Answer 1

I know this a bit, it’s somewhat-secret but not really.

So there are blocks of users that are aggregated together (say, “18-25 year olds in LATAM”, etc) — I don’t know how the blocks are defined exactly in terms of market and demo currently, but the blocks exist.

The users in these blocks pay money to use Spotify, and that revenue gets totalled up. Often there are promotions etc that get some discounts (labels have to sign off on these), so between that and how many people use Spotify in that block and how much Spotify costs there and how easy it is to retain users (recurring payments can be really tough in some markets), the blocks get wildly different revenue.

Within the block, streams are added up. A stream counts if it’s at least 30s of a song. Artists then get money proportionate to their fraction of the streams for the block — except that the fraction to them (vs Spotify) also varies according to the agreements their labels made. And on top of that, the artists themselves have separate agreements with their labels on how much the label takes vs pays out to the artist.

So Spotify might get to keep more money from a block if they’re playing more music from a label that gave Spotify a more favorable deal, e.g. The majors pretty much all have exactly the same payout rates (and would sue the dogshit out of Spotify if they didn’t), but there’s a lot of licensed content from other places as well, hence the “fake bands” thing where Spotify algorithmically pushes music it sort of commissioned.