Music Streaming Revenue: How Low Can You Go?

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The music business seemingly has a lot to answer for. How, when streaming giants such as Spotify continue to grow their profit, can they justify paying out even less per stream to the artist? It's pretty bewildering, and makes for staggering reading. And how can we change it?

Audium published a report recently that showed Spotify’s revenue climbing buoyantly, as its royalty payouts to artists and labels gradually declined. Doesn't make sense, does it?

Some hard figures: this year, Spotfy's ad-supported tier earned $0.00014123 in mechanical royalties per play. So, to bag $100, an artist would need 703,581 streams. Hmm. For the premium tier, Spotify paid out $0.00066481 per stream, which amounts to about $100 for every 150,000 streams. And this number has dropped massively in the last four years.

Digital Music News published some information on two artists' royalty payouts, and this really puts it into perspective. First up, award-winning cellist and composer, Zoe Keating, shared what she made from streaming platforms in 2017, and here are the numbers:

Using RouteNote as her distributor, she earned the most from Amazon Prime Music (by far). At a per-stream rate of $0.0663649, she netted $1,265.38 from 19,067 streams.TIDAL paid out around a quarter of that rate, which resulted in Keating getting $354.42 after 21,817 streams; and at a rate of $0.0048416 per stream, she earned just under 100 bucks from Deezer after 20,460 streams.

Drum roll...

Spotify earned Keating $4,388.93 after 1.15 MILLION plays..! That's a Scrooge-like rate of $0.0038015 per stream. When using CD Baby as her distributor, at a slightly higher rate of $0.0039 per stream, she earned just $5,654.58 after just shy of 1.5m streams.

Five months later, Keating shared her findings again, this time focusing on Spotify only, over the past six years. Here are those bonkers figures:

In 2013, she earned $1,174.35 from 416,112 streams. Using CD Baby as her distributor, Spotify paid her $0.0028222 per stream; and prior to her distributor’s cut, Keating had earned $1,290.49 at a per-stream rate of $0.0031013.

A year later, Spotify’s per-stream rate actually rose to $0.040689 (don't jump up and down just yet): after 712,039 plays, Keating earned $2,897.18. At a per-stream rate of $0.0044713 before CD Baby’s 9% cut, she had earned $3,183.71.

Since 2014, it's been a downward spiral.

In 2015, Keating earned $4,821.07 for 1,487,584 streams. Spotify had paid her $0.0032409 per stream. Prior to CD Baby’s cut, she had earned $5,297.88 at a per-stream rate of $0.0035614.

In 2016, Zoe Keating decided to add a second distributor: using RouteNote, Spotify paid her $2,214.53 after 606,748 plays at a per-stream rate of $0.0038015. Keating didn’t reveal how much RouteNote kept. Using CD Baby, she earned $7,800 from 1,952,933 plays at a per-stream rate of $0.0039940. Keating earned $8,571.43 at a per-stream rate of $0.0043890 before CD Baby’s 9% cut.

In 2017, Spotify’s revenue grew, yet its royalty rates remained stagnant. Ludicrous. And, of course, with nothing short of exponential growth in 2018, you'd expect Spotify might think it's about time to start putting proverbial hands in pockets. Not so, unfortunately.

In 2018, again using RouteNote as her distributor, Keating earned $2,657.25 after 707,891 plays at a per-stream rate of $0.0037538. Through CD Baby, at a per-stream rate of $0.0035298, she earned $3,254.82 after 922,092 plays. Prior to CD Baby’s 9% cut, she had earned $3,576.73 at a per-stream rate of $0.0038789.

So, to summarise, after six years on Spotify, Keating earned just $34,862.71 after 9,409,799 plays, at an average per-stream rate of $0.0037049. Staggering.

This isn't a one-off: country singer, Jason Kirkness, also shared his Spotify payouts - after 337,245 plays, he earned $747.25. He reportedly earned just $0.0022 per stream.

The strangest thing of all is, we can't really do anything about it. Digital Music News did make one good point, though: at least artists earn more on Spotify than they would on YouTube, which pays a mind-blowingly low $0.00074 per stream.

It makes you wonder what might happen next, doesn't it?