woman listening to music

Profile: Spotify – A Company

Spotify is easily the most convenient way to hear music. You can find your favorite niche artists, as well as most of your favorite big names. Now, how much do you think the artist deserves to make for a single stream? A dollar, maybe 25 cents? Typically, the holder of the rights to the music receives about $0.006 to $0.0084 cents per stream. Since more than one person can own the rights, many artists end up splitting the funds between four or five different groups of people. 

If you are a small artist, you usually aren’t using Spotify for the money. You’re using it to get your music out there and land on a few blog curated playlists, and, if you get lucky, a Spotify curated playlist. This tweet in particular stood out to me,

Stars Hollow started in 2015 and have tons of streams. For many artists, to accumulate five thousand streams is a major accomplishment. Yet for some reason, they don’t even make the same amount of money as they would selling a single t-shirt. Are these artists a retail store or entertainers?

As for large scale artists, especially in the pop culture scene or currently trending, they earn the same amount, sometimes more. According to CNBC, the major artist Taylor Swift earned between $280,000 and $390,000 on “Shake It Off,” which had over forty-six million streams. Is that a fair or unfair price for that many streams, and an artist of her size and influence? 

Spotify’s quarter three revenue in 2019 was over two billion dollars. They gained insane amounts in advertisement revenue. What do they do with all of that revenue? As of 2019 they had 1,708 employees. If you split all the profits equally between every employee, each one would make over 1.2 million dollars a year. So, where is the money going?

The underpayment of these deserving artists is evident, but we can’t ignore that Spotify still opens doors. Fletcher turned into a star overnight through Spotify curated playlists. She gained a significant social media following, which helped to further her career. She sat side by side with Alex Norström, Spotify’s Chief Premium Business Officer, and explained that Spotify created a great opportunity for her and for many other artists. 

In that same interview, the interviewer asked Norström how much they pay an artist per stream. Surprisingly, he said “I don’t have that number off the top of my head”–but then could proceed to emphasize the big number: that they have paid out ten million euros to date. How much of that money went to big artists like Drake, who made $1.8 million in just the first day Scorpion was released? Is every artist getting paid the same amount per stream? Is Spotify willing to pay what artists deserve? All questions that Norström couldn’t answer off the top of his head.

Other streaming services pay artists varying amounts. Here are the exact break downs:

Napster – $0.019 per stream
TIDAL – $0.0125 per stream
Apple Music – $0.00735 per stream
Pandora – $0.00133 per stream
YouTube – $0.00069 per stream

Spotify makes more revenue than a lot of other services, yet three of them pay their artists more. The majority are all streaming services, working to benefit artists and record labels. Spotify, on the other hand, is a company working to benefit itself.