In this digital age, sending out demo cassette tapes or CDs to record labels is an antiquated way of getting your music out there for people to listen to and enjoy. Independent artists no longer need to rely on that dream record deal to build their fanbase, and instead can go at it on their own, making the best of social media and music streaming platforms. Numerous high-profile artists in the music business have been discovered on YouTube or after going viral on TikTok. Streaming platforms like Spotify and Apple Music also provide newcomer artists unprecedented access to wide audiences. So, if you want to get your music noticed and heard by millions of people, you simply have to have a strong digital presence.
Spotify is arguably the most popular music streaming platform in the world, and it’s a great place for emerging artists to build a fanbase, land their songs on popular Spotify playlists, and create buzz and interest around their music. The platform offers various benefits to music creators, from wide audience reach and discoverability, to promotion and marketing tools, collaboration opportunities, and last but certainly not least, streaming revenue opportunities. But how does this work, and how much can artists get from streaming their music on Spotify?
How does Spotify pay musicians?
The way Spotify pays artists on the platform is not entirely transparent, but we know that there are several factors that influence the process. The payment structure varies from country to country, and depends on the type of subscription, either free or premium, among other things. Spotify actually sets aside part of its revenue to serve as a ‘royalty pool’ for each country where it operates, and this amount is not publicly disclosed. The total number of streams on the platform is another influencing factor, as is the number of streams that your songs have generated on the platform. Premium Spotify users also tend to generate more royalty revenue compared to free users.
How does Spotify’s ‘pay per stream’ work?
The pay-per-stream system basically means that, the more streams your songs generate, the higher your revenue will ultimately be. Usually, you would determine the per-stream rate by dividing the royalty pool by total numbers of streams in a given timeframe. However, Spotify’s pay per stream system works more like a ‘streamshare,’ where results can vary depending on several factors, including the country, the type of subscription, and the distribution agreement with the artist. As we’ve already mentioned, the revenue extracted will further be split according to a pro rata model among all the rights holders and the streaming platform.
While there are various Spotify revenue calculators out there you can try, there’s no way of knowing for sure, but the average amount that musicians can expect lies somewhere between $0.003 to $0.005 per stream. This means that an artist needs a very high number of streams to be able to make any significant revenue - research showed that it takes more than 800,000 streams per month to earn a wage of $15 an hour, so you definitely can’t rely on Spotify royalties as an emerging artist.
What's more, the revenue coming from Spotify streams is split: 70% goes to the rights holders, and 30% to the platform. But that 70% doesn’t always all go to the artist; sometimes it will be split among the songwriter, publisher, and owner of the master recording, which could mean the artist or the record label.
What can affect Spotify royalty rates?
While it’s clear that it’s impossible for a newcomer artist to make a living strictly from Spotify streams, there are certain factors that can influence the revenue amount you can generate from music streaming platforms. These include:
- The country: Spotify streams generate slightly different royalty rates depending on the country. This is mainly due to market conditions, local regulations, and different licensing agreements.
- The subscription type: Premium Spotify subscribers tend to generate higher royalty rates compared to free users, as premium subscriptions generate more revenue for the platform itself.
- Label deals: Major record labels usually negotiate different royalty rates and licensing agreements with Spotify, which can result in higher per-stream rates for the artists who sign with them. Independent artists and small labels don’t usually have the same negotiating leverage.
- Total overall revenue: Royalty rates per stream can also be impacted by the total revenue generated by Spotify, as well as the royalty pool for a given time period. When the total revenue generated on the platform increases, per-stream royalties can also be higher, although the difference won’t be too significant.
- Listener location: Royalty rates can vary depending on the location of the listener, as well, depending on the specific licensing agreements in each country or region.
- User behavior: Another important factor that can play a role in how much revenue is generated by stream is user behavior. If listeners skip tracks, rewind, or play them on repeat, this can impact royalty rates, either negatively or positively.
How to boost earnings from streaming platforms
It’s impossible as a musician to influence royalty rates per Spotify streams, as the platform decides royalty allocations based on the factors we’ve mentioned above. But there are things you can do to boost your exposure and popularity on the platform, and earn more streams, because ultimately this is your best shot to increase your Spotify revenue.
Get your music featured on popular playlists
One great way to increase your visibility on Spotify and get your music discovered by more people is to get your songs featured on popular Spotify playlists. There are three types of playlists on the platform: user-generated playlists, algorithmic/personalized playlists, and editorial playlists.
There’s no way to make your way onto user-generated playlists, but you can work to land your songs on popular algorithmic playlists, like Release Radar, Daily Mix, or Discover Weekly. These playlists have millions of followers, and they’re a great way to get your music out there in front of potential fans. You can also try to land your songs on coveted editorial playlists, and you can do this by submitting music for consideration from a Spotify for Artists account. The more visibility and exposure you can get for your music, the better, because this will get you more streams, and consequently more revenue from per-stream royalties.
Consistently release new music
Another thing you can do to boost your Spotify streaming revenue is to release new music at a consistent rate. It’s not enough to just launch a single and put all of your efforts into promoting it. Keep recording and releasing new music, and stay active on the platforms, engaging with other artists, editors, and your followers. If you have a Spotify for Artists profile, you can draw valuable insights from analytics reports that show you which of your songs have more potential, and how users on the platform are interacting with your music. Are they skipping songs or are they playing them repeatedly? Try to figure out what your target audience enjoys, how they interact on the platform, and find ways to reach them with the right content.
Build and grow your fanbase
We’re clearly just pointing out the obvious here, but it’s important to constantly work on building and growing your fanbase. Spotify does factor in the number of followers, interactions, as well as streams, when it comes to royalties allocations, so the more followers, the better. More followers means more streams, but how can you get people to follow you and become part of your community?
Stay active on social media, engage and interact with fans, respond to messages and requests, and get their feedback. Follow other artists, producers, DJs, and labels, and try to engage with like-minded professionals as much as you can. Make the best of the digital tools at your disposal, including Facebook, Instagram, YouTube, and TikTok, where your content has the potential to go viral and end up a streaming sensation on Spotify. Be sure to link your social media profiles everywhere, to make sure followers cand find you and explore your music on streaming platforms.
Frequently Asked Questions
How much does 1 million streams on Spotify pay?
The payment for 1 million streams on Spotify can vary, but it is generally estimated to be around $4,000 to $7,000. This amount is, however, split between the streaming platform and the rights holders.
How many songs have 1 billion streams on Spotify?
Only 417 songs have surpassed the 1 billion streams mark as of June 2023, while 34 songs surpassed 2 billion, and just 3 songs surpassed 3 billion streams.
How much does Spotify pay for 10 streams?
Spotify pays roughly $0.04 per 10 streams, which means you’d need 1,000 streams to generate $4 in revenue. This is influenced by various factors, like country, subscription type, and licensing agreements.
How much does Apple Music pay per stream?
Similarly to Spotify, Apple Music pays an average per-stream rate between $0.007 and $0.01, depending on the subscription type and location of the listener.
Want to learn more about music promotion and getting exposure as a newcomer artist?
Join Xposure Music and gain access to some of the best music industry professionals in the U.S. Top experts from Sony, Columbia, Def Jam, or Universal have already joined our platform, and they’re ready to give invaluable, on-point feedback on your work, which can help you land that dream record deal or publishing deal you’ve been working towards. Sign up now and reap the rewards.
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