You pay 10$ to listen to hundreds of songs a month, how can it possibly be profitable for artists?
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Reading the comments… When exactly did r/explainlikeimfive turn into r/askreddit?
People generally misunderstand how streaming services work, and erroneously focus on the “per stream” rate, which is meaningless.
70% of all of spotify’s revenue goes to labels/artists. The amount each label/artist receives is based on how much time is spent playing their content each month.
Yes, it’s a low amount, but this is a function of spotify’s revenue model, especially because they have a lot of “free tier” users who generate far less than $10/month.
When artists complain that they don’t get enough money “per stream”, they’re ignoring the fact that they keep getting money as long as their music keeps getting played. Compared to a CD sale, or an iTunes download which pays out once and then never pays again. People can even sell used CDs and artists never receive another penny.
Perhaps artists should get more, but the only realistic way to make this happen is to increase the monthly price of the service. The reason why Tidal claims to be “better for artists” has nothing to do with them having a fairer model, they pay the same 70% that spotify does. Tidal is just a more expensive service.
Another argument is that artists/labels used to just make too much money, which they spent on cocaine. The largesse of the music industry of the 90s was pretty appalling. Artists now have to make more money from touring, and they have an incentive to make music which will stand the test of time, to get more streaming revenue in the long-term.
There’s a lot of difference forces at play, it’s complicated. It’s not inherently “bad”, but it can create bad incentives (as well as some good ones).
Deezer has been working to make the payout system fairer too: [https://www.deezer.com/us/ucps](https://www.deezer.com/us/ucps)
A few friends of mine who are not super famous have releases on spotify. They each bring in about $30 a year. They always do better when selling merchandise, tickets, and actual physical copies. One of my friends regularly posts how much he makes from Spotify (he posts the check, minus personal info) and he does it to make a joke.
This man has been in the music business since the 80s, responsible for a TON of influences, a record company (Tooth and Nail- my friend is Jesse Sprinkle), and SO MANY bands he’s played in to varying success and fame.
Dude lives in a 3 bedroom with all his kids and family and lives SUPER frugal.
Spotify doesn’t pay shit. As it was thoroughly explained in another comment, it’s huge musicians/performers who make Spotify money but it requires a COLOSSAL number of plays.
Netflix has a documentary on spotify. Artists aren’t paid by spotify their labels own the artists music rights and the labels sell the rights to spotify.
It’s not. It’s pretty much a loss leader to promote merchandise, shows, etc now. Just like Amazon Prime has now become for filmmakers.
It’s quantity vs quality, Spotify pays less in royalties than a physical sale would, but short of someone continually buying the same CD (or Vinyl etc) then it’s a one time purchase, an artist could theoretically earn more in the long run with Spotify.
The problem for artists is that the royalty rate Spotify pays is very low, so the artist either needs to be incredibly popular or play a very long game in order for it to be profitable.
However, Spotify does offer the artist exposure to a huge number of customers, sure, it’s not worth the poor royalty rate, but it does at least give them a chance to gain new fans and thus expand their pool of potential merch and ticket buyers.
Spotify had a big press conference last month to proudly announce that as of that day their artist payouts had passed a milestone. They had paid a total of one hundred dollars in artist royalties.
A lot of people responding are missing a key point, which is that it isn’t profitable for the majority of song makers
artists get on average $0.004 per listen, which isn’t much, unless you’re huge. for example, lil nas x has 39,879,823 listeners a month, so he would get $159,519 per month
Spotify and all of the likes pays barely nothing to artists, period. It has become more of a promotional tool, like YouTube and such. And the very, very few artists who “make” money they are so big that that money would probably mean nothing to they regular running costs. They are exceptions of course.
Back in the 50s artists would put out two single ls on a record and see no money from that but use it as a promotion tools for radios. They would make their money from touring. That model has gone through a full cycle of transformation (and excess) and is back now.
People (specially the ones not in the industry) like to do all sorts of calculations which doesn’t exist in the real world. For example:
– “You put a record in Spotify and you get paid forever”. Except you actively promote your music (which cost money and time), your music will get buried among the other millions options.
– “There was tons of excesses in the 80s and misspending blabla”. Completely irrelevant. The average artist just want to be able to pay the rent and have done extra money to invest on the next project. Those people make pennies and it is not sustainable. Most make it out of ignorance or just pure love for the craft.
The worst thing of all is the fact of what Spotify has done with music in general: devaluations the craft and make music a commodity or even worse, “content”. This is very dangerous and it’s devastating repercussions are slow and long term to the point by the time we realise, culture as a whole has dropped a few notches and we all pay for that.
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