Recently the music industry has started getting digital. Nowadays, artists also pay attention to publishing their works on digital platforms like Spotify, Apple Music, SoundCloud, and more. They also generate good revenue, apart from allowing the artists to reach massive listeners in a short time.
Spotify is one of the largest digital platforms with the opportunity for music artist to build their music career and increase their income. The platform has approximately 65,000 artists who released around ten songs with more than 10k monthly streams on Spotify in 2020-2021. An artist can share their music on Spotify and get a payment on Spotify’s pay-per-stream basis.
However, the payment may vary depending on the “stream share.”
What is Spotify Pay per stream?
Digital platforms have a payment method where they pay the artist whenever their music is streamed there. The rate depends on per stream. It may vary based on different factors.
Therefore pay per stream is the money the digital platform gives the artist for every stream on every track and song on the digital platform.
How much Spotify pays?
Spotify pays the artist when their music is streamed.
But the exact royalty structure followed by Spotify to pay a music artist is off-the-record info. Moreover, there is no official revelation about it. Multiple factors contribute to this payment structure. Hence, it’s challenging to calculate the exact amount beforehand. However, per the reports in 2020, on average, Spotify gives musical artists around $0.003-$0.005 for every stream.
The split revenue structure can be – 70% for the artists or right holders and 30% for Spotify.
Spotify Streaming Payouts
Spotify generally follows a platform-centric distribution model; therefore, the revenue generated on the platform after an artist releases their music depends on a few factors, which include:
- The total revenue pool Spotify gets from the streaming and the stream on the platform.
- The streaming of the music of the artist on the platform
However, since you cannot find an all-in-one revenue pool in digital platforms like Spotify, the calculator is based on subscriptions and local and international markets. Multiple factors impact the revenue, and the rate you get from the stream per pay on Spotify will also change every time.
Recording Royalties: Whoever is registered as the music rights holder can get a share of the royalty from Spotify as per the contract done with the music artist. The right holder’s name includes the record label, the composer, or the artist. The royalty is paid to them through their record label or company.
Publishing Royalties: This is the money the owner gets composing the song.
Factors Impacting the Spotify Royalty Rates
The payment generated on digital platforms varies from artist to artist, and three main ideas to decide your payouts –
- How is it distributed?
Spotify does not pay the artists following any agreement between them and the artist, but it depends on the agreement made between the music label or distributor and the artist. You can maximize your royalty from the digital platform by having a distributor who works at a minimum commission rate.
- The geographical area of your listeners:
The geographical location of your listener plays a crucial role in determining your payment rate. The rate of pay per stream is different for different countries.
For example, the rate in the US is higher when compared to Portugal. Therefore, it is better to have an idea about your global listener base if you are willing to know the royalty you will get from the Spotify stream.
There are two types of plans for listeners on Spotify; a free account and a premium subscription. Because premium listeners bring enough money, you get better royalty when premium subscribers stream your music.
How Can You Increase Your Earning On Spotify Through Streaming?
Some specific ways will help you to increase your earnings on Spotify through streaming. We have explained them in the below points:
Most listeners listen to music from the playlists. You may get your music on editorial playlists or user-created playlists.
If you can successfully place your music in the prime position, the algorithm will act better, and as a result, more listeners will be able to reach you. Your earnings through Spotify streaming will automatically increase if you get a massive listener base.
As a part of promoting your music, you can make your playlists, which can boost your music, and it may get to the editorial playlists. Plus, you can contact other playlist curators to have their music on their playlists. You may also choose to collaborate with other musicians on their playlists. You can keep some of your most-liked songs on the top of your playlist because a listener generally listens to a few songs from the top of the playlist before they subscribe.
- Tracking Your music:
You can also keep track of the songs or musical pieces you have released on the platform. Besides getting a clear idea about the musical trend, you can also know about your listeners and the type or genre of songs they prefer. If there is an increase in the number of listeners, you will also come up on the search list. It will increase your opportunity to be found by many new users.
- Spotify Discover Mode:
Spotify has introduced a discovery mode where the listeners find new artists. They put an artist on the top of the search list. It increases the chances of your music getting streamed. The quality and style of music also play a crucial role because it may get ignored even after being positioned at the top search if it does not suit the listeners’ taste. Though the platform does not charge any money for the Discovery Mode, they take a higher rate from the money made by you.
- Spotify Ad Studio:
It is a platform that manages the audio advertising campaigns for Spotify. Skilfully curate the audio ad to draw the listeners’ attention.
- Social media:
Being active on social media and creating your community is an excellent help for artists new to digital platforms. You can reach your fans on social media and promote your music there. It will help you find the correct audience without beating around the bushes.
However, if you plan to be on Spotify with your creation, reach Deliver My Tune. You will get featured not just on Spotify. But on other digital streaming platforms as well.