(Hypebot) — With the industry now gone full-fledged digital, releasing music to DSPs like Spotify is a necessary step for getting it into the ears (and spheres) of the everyday listener. But how much do you really earn?
by DITTO MUSIC
But how many bucks are you making for your streams? Let’s find out.
How much does Spotify pay per stream?
Spotify pays artists between $0.003 – $0.005 per stream on average.
That works out as an approximate revenue split of 70/30 – so that’s 70% to the artist/rights holders and 30% to Spotify.
REMEMBER: The rights holders of a song can include; the publisher, songwriter and the master recording owners (i.e. the artist and/or label if they’re signed to one).
Spotify Royalty Calculator
So how can you work out how much you could earn from Spotify streams?
Well, the exact amounts artists can generate via streams of their music is closely guarded, off the records info.
But if you want to get a general idea how much you could potentially earn off the back of Spotify streams, let our Spotify Royalty Calculator do the math for you!
IMPORTANT: THE ROYALTIES PREDICTED BY THIS CALCULATOR WILL NOT BE 100% ACCURATE. IT IS A ESTIMATE – BASED ON FIGURES FROM THE USA. MANY FACTORS AFFECT STREAMING ROYALTIES AND THIS CALCULATOR SHOULD ONLY BE USED AS A GUIDE.
As we mentioned before – it’s impossible to work out exactly how much you should or could be earning per stream based on Spotify’s own confidentiality and the vast number of factors influencing your stream rate.
So don’t get too caught up on the exact calculations, and instead, focus on how you can boost the amount of money you do make from online streams once you upload your music to Spotify.
How do Spotify streaming payouts work?
Spotify, like many other on-demand streaming services, follows what’s known as a “pro-rata” or “platform-centric” distribution model.
This means the revenue generated and paid out to individual artists releasing on the platform is divvied up based on the following 4 factors:
1. Spotify’s total streaming revenue pool
2. The negotiated global payout as a percentage of that revenue
3. Total number of streams on the platform
4. The number of your streams on the platform
So, in the streaming world, there’s no such thing as an all-in-one revenue pool.
Instead, there’s loads of separate buckets – for every kind of subscription, every local market, country and so on. And different types of streams can only mean one simple thing – not all streams are created equal.
For every artist releasing music, the pay per stream rate will be in constant flux — simply because there are hundreds of factors affecting the overall revenue.
Let’s dive a bit deeper and take a look at the 3 main ones for Spotify.
What is a Spotify ‘pay per stream’?
Basically, what it says on the tin.
A ‘pay per stream’ is the amount of money or rate of pay, generated every time someone streams a song on any kind of digital streaming platform.
Music streaming generates 2 kinds of royalties;
So for artists releasing their music on these platforms, the pay per stream is essentially the amount of money the artist makes for a single stream of one of their tracks or songs.
And with the no.of streaming service subscriptions up by almost 25% in the US between 2019 – 2020, it’s now more important than ever for artists to release their music to every major platform, including Spotify, Deezer, Amazon and Apple Music. Check out how much Apple Music pays artists per stream.
What can affect Spotify royalty rates?
How much you get paid per stream on Spotify varies from artist to artist. Here’s why.
Spotify stream rates are influenced by 3 main factors:
1. Who you distribute with
Spotify doesn’t pay artists royalties based on any kind of rights agreement between Spotify and the artist.
Instead, the music royalties you’ll receive as an artist on the platform are based on your agreement with your music distributor or label.
Which means the amount of money you’ll get paid per stream on Spotify is influenced directly by the music distributor you’re working with (and how big a piece of the pie that distributor takes!).
At Ditto Music, we want you to see as much buck for your stream as possible. Which is why we work on a 0% commission rate basis, meaning you’ll keep 100% of all the royalties for every stream of your music.
2. Your listeners’ country of origin
Believe it or not, where your listeners are tuning in from matters.
Not every country pays the same amount of money for streaming on Spotify.
So for example, listeners in the US will pay $0.0039 per stream, while listeners in Portugal will only pay $0.0018.
So if you already know you’ve got a global base of listeners from across the world, chances are this will heavily influence your pay per stream rate.
3. Your listeners’ Spotify account plan
Spotify operates 2 types of subscription plans for users streaming music on the platform; a Free account and a Premium account (which requires a paid subscription).
As paying listeners, Spotify Premium listeners bring in more money to the platform while they listen, compared to Free listeners.
Which also means, Spotify offers better royalties when Premium users stream your music.
How to earn more money Spotify streams
Getting your music streamed on Spotify is just one form of streaming income.
While Spotify might be the most popular music streaming service among listeners, millions of people use other streaming services too. Which means you’ll maximise the money you can make from streaming by releasing music to as many platforms and online stores as possible.
Being present on more than one music streaming platform is always a sure way to build your following and reach new listeners too!
Playlists are also the main way listeners consume music on streaming services – whether that’s using editorial playlists curated by the app itself, or user-generated playlists too.
Which means getting your music playlisted is another way to make more money from Spotify streams, by putting your tracks in prime place to get picked up by the algorithm and more listeners.
And ultimately, the more streams and fans you can generate on Spotify, the more revenue you’ll return in the form of music royalties.
Check out the vid below to hear 11 different ways you can get more streams on Spotify as an unsigned artist.
On top of making money from streaming royalties, selling your music online presents other opportunities too – like building a global listener-base, getting playlisted, or even getting discovered for a sync opportunity – making it a huge pool of uncapped potential for new, aspiring artists!