How Much Money Do Bands Make From Streaming Music Services Like Spotify?
ominocity.com
ominocity.com
Furthermore, the question the article asked is how much money do "bands" make from streaming, yet it only included a band that has a direct relationship. The bulk of bands on Spotify are put there by the major labels and one or two collectives of independent labels. The major labels setup the licensing structure such that the bulk of it is paid up front for a setup fee, and that fee is divided evenly among their artists, even though a small percentage of those artists constitute the bulk of the streaming. 95+% of the artists they include in that setup are not recouped, which means they haven't earned enough royalties to offset the "expenses" associated with releasing their album. The label keeps your money until you are recouped. So, the label shares nothing with 95% of the artists from this massive, tens-of-millions-of-dollars fee they charge. Then they pay 5% of the fee to their recouped artists - the megastars - even though those artists will generate 95% of the listening. After the setup fee, the per stream fee that gets paid to the artists is minuscule, and even much of that is swept under the rug during shady accounting.
And if that wasn't enough, the labels own 18% of Spotify (I've heard it's even protected against dilution) and will ultimately unload their stock on the public right before the licenses expire and they hike the rates up to an unsustainable level, drain all of the investment dollars out of the company, and start the cycle again.
[0], for example, had some real world numbers and an interesting discussion. The example is probably heavily biased, but personally, when I see "iTunes/Bandcamp/Amazon: $82,000 | Spotify: $300", the conclusion is pretty obvious. Also, her reported rates were around $0.004/listen, on average.
http://449123359ecac587d434-9396469e34eeeef2caa4cdabedda4716...
There's some more recent ones but they're identical to what you see.
iTunes match has paid out several different amounts: http://449123359ecac587d434-9396469e34eeeef2caa4cdabedda4716...
For those that may not know, cdbaby taks a 9% cut of what services pay out, but there's no yearly feel like with tunecore.
I don't think it's a good limitation to put on the accounts. Most people aren't going to upgrade (they'll just play the song on YouTube or download it), and artists are losing out on money from plays and potential fans.
While it may not add up to much for small, independent bands, at least they're getting their albums out there to a much larger audience. I know I've discovered bands I wouldn't have bothered to download if it wasn't for these services.
I estimated my top playing artist at 6000 listens. That's max $60 on Spotify. I have paid for more than that in albums over the years.
That's just me, of course, but I'm trying to give some perspective.
Apple pays them, but the cost is passed on to the user in the annual fee.
The cost may be passed on to the user but they get a lot for their $25 (streaming, downloading, and instant access to all their music - whether it was bought on iTunes or not - on all their devices).