Spotify changed not only how people listen to music but also how creators make a living from it. But how do artists make money on Spotify?
Learn about Spotify and its royalty system, how Spotify pays artists, and explore alternative streaming platforms. By the end, you’ll be able to decide on the best platforms to stream your music and other kinds of content.
- What Is Spotify and How Does It Work?
- How Does Spotify Pay Artists?
- Spotify Streaming Royalties 101
- How Much Does Spotify Pay per Stream?
- Alternative Ways to Make Money as an Artist
- Spotify vs Other Streaming Platforms
- Tips to Gain More Streams on Spotify
- To Summarize
What Is Spotify and How Does It Work?
Spotify is the most popular music streaming service worldwide in 2023. Their founding idea was to revolutionize how people listen to music and allow listeners to discover new songs while showcasing, paying, and protecting artists from piracy.
Musicians stream content on Spotify through Spotify for Artists, allowing creators to promote their merch stores, blogs, and concert tickets.
Music listeners can access millions of songs and other forms of content from artists, create playlists, and receive recommendations based on their liking. All content is played through the app and cannot be exported, protecting creators against illegal copies. The service also gives creators analytics tools to understand and expand their fan base.
Spotify is also an excellent place to discover new and independent artists.
How Does Spotify Pay Artists?
Spotify doesn’t sign royalty agreements directly with the artists but with their distributors or record labels, who often take a cut from the profit.
Streaming royalties are sums paid to a composer, author, or copyright owner for their work sold or performed. Each time a song is performed, the owner must receive royalty payments until the copyright expires, which usually takes 70 years.
The payment frequency also depends on the contract, although streaming payouts are usually distributed monthly.
Spotify pays the rights-holders, and then the labels, distributors, or publishers (for songwriters) pay the artists accordingly. An independent artist must have a contract with a music distributor before signing up for Spotify for Artists. Subscription-based services like Distrokid, Ditto, and Tunecore allow virtually anyone to stream their music on Spotify or other streaming platforms.
Spotify Streaming Royalties 101
Types of Royalties
There are two kinds of royalties on Spotify based on who receives them:
- Recording royalties are usually paid to distributors or record labels when they’re the licensors or rights holders of the artists’ songs.
- Publishing royalties are for composers, paid to societies or publishers, who receive them from Spotify according to where the song is played.
How to Calculate Spotify Royalties
According to Spotify, its music streaming service pays rights-holders a net revenue from what’s earned through advertising and Spotify Premium listeners.
This amount is calculated by deducting taxes, payment processing, billing fees, and sales commissions from the total earnings.
Spotify then divides the artist’s monthly streams by the total streams on the platform. This streamshare calculation is used instead of an absolute per-play or per-stream rate.
The amounts will differ depending on the regions the songs are listened to, how many streams were in the premium or free subscriptions, and how many ads were displayed.
How Much Does Spotify Pay per Stream?
Spotify pays $0.003-$0.005 per single stream, but how much Spotify artists make depends on other factors.
Listeners can also alter the artists’ streaming payouts based on their subscription tier, location, and how often they play a song. Use an online streaming royalties calculator to estimate how much Spotify and Apple Music pays artists.
Alternative Ways to Make Money as an Artist
Selling Spotify Merch
Create and monetize a blog on WordPress, your website, or even Spotify. A blog brings organic traffic and increases exposure, especially if you include links to your artist page from various streaming services. Partner with advertisers that align with your image, or use it as a platform to promote and sell your merch.
Teach your fan base about the music industry through videos, tutorials, instructional blog posts, conferences, and chats. Combine these strategies and offer courses with recording, singing, playing, and production techniques and how-tos.
Check out our blog for more information on How to Make Money as an Artist.
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Spotify vs Other Streaming Platforms
When looking for the best streaming platform to make money in the music industry, you must consider the platform’s popularity. After all, the more users there are, the more chances to get your music streamed and make more money.
Let’s compare some of Spotify’s pros, cons, and subscription plans with other streaming services.
Spotify’s pros make it one of the best options to develop a music career – a solid audience with a discovery algorithm that allows new artists to gain recognition. They pay royalties at an industry standard and charge users reasonable subscription fees.
Monthly subscription plans
- Premium Individual – $10.99.
- Premium Duo – $14.99 for two profiles.
- Premium Family – $16.99 up to six profiles.
- Premium Student – $5.99.
Apple’s music subscription service combines streaming with offline listening. Apple Music for Artists offers exclusive resources such as spatial audio and Logic Pro, plus marketing and analytics.
Music royalties are calculated according to streamshare and vary depending on the listeners’ location and subscription plan. The Apple Music pay-per-stream amount ranges from $0.007-$0.01.
Monthly subscription plans
- Individual – $10.99.
- Family – $16.99 up to six profiles.
Tidal is a premium music streaming service owned by Block Inc. (formerly Square Inc.) that guarantees top-quality sound and recognition for behind-the-scenes song contributors.
Music business heavyweights, including Alicia Keys, Daft Punk, Madonna, Jay-Z, Beyoncé, Rihanna, and Nicki Minaj, own shares of the service, promoting artist support and promising more money and album sales.
The pay-per-stream amount for Tidal is around $0.011, making it one of the best-paying options for artists.
Monthly subscription plans
- Free 30-day trial.
- HiFi individual – $9.99.
- HiFi family – $14.99 up to six profiles.
- HiFi plus individual – $19.99.
- HiFi plus family – $29.99 up to six profiles.
- Student – 50% discount.
- Military – 40% discount.
This digital streaming platform is less known than Spotify but may offer other advantages for audiophiles and artists aiming at sophisticated niches using the latest HiFi-compatible equipment.
Qobuz brands itself as a premium service and invests in quality, being the first to stream high-quality 24-bit FLAC audio up to 192kHz. In addition to conventional steaming, its subscribers can access curated original editorial content.
Qobuz has an unclear pricing structure and is on the expensive side. Its official website displays the same price for many plans, with extra costs added after subscribing.
The pay-per-stream amount for Qobuz is undisclosed. In 2018, Qobuz paid around $0.043 per stream, boasting its status as one of the better-paying streaming services.
- Studio Solo – $10.83.
- Studio Duo – $17.99.
- Studio Family – from $17.99.
- Sublime Solo – $15.
- Sublime Duo – $17.99.
- Sublime Family – from $17.99.
Tips to Gain More Streams on Spotify
- Market yourself.
Use all available channels – social media, YouTube, and your own website to make your songs known. Use every Spotify marketing tool, including the Spotify Ad Studio.
- Find the right distributor.
Look for the best distributors who charge lesser fees, offer more resources, and publish your music on more platforms. Distrokid and Tunecore, for example, are favorites of many artists.
- Grow your Spotify audience organically.
Avoid services selling fake streams and followers via bots, which could result in penalties or permanent banishment from Spotify.
- Claim a verified Spotify for Artists profile.
This adds customization options like a profile picture and bio, releases, and show information. Verified artists have detailed analytics and promotional tools and can submit their songs to Spotify’s editorial playlists.
- Use Spotify pre-release campaigns.
Get your new songs on your followers’ radar and increase the probability of Spotify’s algorithm adding them to lists such as Discover Weekly.
- Pitch your work to the official Spotify playlists.
If accepted by Spotify’s curators, they’ll be shown to millions of listeners worldwide. Be sure to submit one track at a time through a computer. The song should be unreleased and submitted seven days before the release date.
- Create several Spotify playlists.
Makes some with only your songs and a few featuring other artists’ works.
- Submit your songs to independent curator’s playlists.
Also, partner with independent artists to create collaborative playlists. Find independent curators on platforms like Musosoup, Soundplate, and SubmitHub.
- Release music regularly.
Creating new pieces may be challenging. Maintain a regular flow of new releases by recording covers, acoustic versions, or remixes to keep you in the loop.
Artists make money on Spotify mainly by receiving streamshare royalties paid via distributors. Additional revenue sources include selling Spotify merch, blogging, and teaching.
Artists make $0.003-$0.005 per stream, depending on where they’re played, their listeners’ subscription type, and how often their songs are streamed. A distributor and record label may also take a cut from the profit.
Spotify pays per streamshare, not by song. An artist makes from $0.003-$0.005 per stream, depending on factors like the listeners’ country, how often the song’s played, and the subscription type.
The listeners’ location, subscription type, and how often the song is played will affect how much an artist earns, but a million streams on Spotify can pay around $1,000-$8,000.
Depending on the listeners’ subscription type, where and how often the song is played, 1 billion streams on Spotify pay around $1.5-$2.5m.
5,000 streams generate around $20, depending on the listener’s location, how often the song is played, and the type of subscription.
You’ve learned how artists make money on Spotify and how it compares with other music streaming services.
We also covered how streaming platforms pay artists and the best strategies to gain more streams. Plus, you know how to make more money with art and multiply revenue sources by adding POD merch to your channel.
We wish you a fulfilling and profitable artistic journey!
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