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On the surface, Spotify’s new interactive "Year in Music" feature is a pretty fun way to look back at your 2015 listening habits. Your most-streamed artist might remind you of those weird couple of months you spent staring at the ceiling listening to Kate Bush. Your most-streamed track might make you reconsider your choice to put that Rae Sremmurd song on every playlist. But Year in Music’s quantitative breakdown inherently raises questions about what your stream count really means for artists, i.e., how much money you’re actually paying them. With Year in Music, Spotify has unintentionally given users a tool for determining their monetary value as a fan — at least when it comes to streaming.
Earlier this year when The Verge obtained a copy of Sony’s Spotify contract, we noted that Spotify uses a complex formula to determine the royalties artists earn from streams. Major labels likely receive a sizable sum from Spotify, but not all of that money is going to artists. And not all artists get the same cut of Spotify revenue either: depending on their contracts with the label, some musicians might only recoup 15 to 20 percent of the streaming revenue they brought in. Other factors also come into play, like the country in which a song was streamed and the currency value in that country. Still, Spotify admits the average "per stream" payout to rights holders lands somewhere between $0.006 and $0.0084.
Here’s what that means for me. My top artist of the year was Built to Spill, whose songs (mostly from There's Nothing Wrong with Love) I streamed 267 times over the course of 2015. Using the upper limit of Spotify’s estimated payout, that would be 267 x .0084, which means I paid Built to Spill somewhere around $2.24 for an entire year of music. And that $2.24 is distributed among the music's "rights holders," which includes labels and publishers. So the band is getting even less than that. My most-streamed track of the year was The-Dream’s "That’s My Shit," and I’m sure Terius Nash appreciated the 27 pennies that earned him. I listened to 13,000 minutes of music on Spotify this year, which means I paid around one-tenth of a cent per minute. And I'm paying Spotify's $10 per month subscription fee; if I were relying on its free, ad-supported tier, the payout for artists would be even smaller.
It's not just me either. Here's about how much some other Verge staffers paid their favorite artists (technically, the rights holders) this year. Micah Singleton paid Kendrick Lamar $2.94. Russell Brandom paid Donald Byrd $3.03. Leah Christians paid The Wombats $3.25. Dan Seifert paid Family of the Year $1.05. And Kaitlyn Tiffany, the only person on staff who streamed enough of one artist to almost pay for a full album, earned One Direction $9.95.
Of course, we're just individual people with limited listening power. The most popular artists on Spotify are racking up millions of streams worldwide, which actually does translate into a lot of money. Drake was Spotify’s most-streamed artistthis year, with around 1.8 billion streams. That means Drake earned somewhere in the ballpark of $15 million from Spotify. Rihanna, with over 1 billion streams, earned around $8 million. 2015’s most-streamed song, Major Lazer’s "Lean On" (ft. MØ and DJ Snake) brought in around $4.5 million for the artists behind it.
But even these massive numbers are paltry when you consider what fans might've spent if they had purchased a full album. In order for the rights holders of an album to earn $10 (the cost of most digital downloads) from Spotify, an individual user would need to stream the tracks on it 1,190 times. And in my small sample size of Verge staffers, most capped out at a few hundred streams per artist.
Much has already been said about how little Spotify pays artists and how unsustainable the current streaming model is for artists. Unless this model changes, or labels take a smaller cut of the profits, the numbers will remain minuscule for smaller artists. But Year in Music makes that talking point clear on a personal level. It inadvertently gives users everything they need to figure out much of their money is going to the musicians that soundtracked most of their year. Still, I don't think any of us will cancel our Spotify subscriptions over this, so artist support will need to come in other forms. I hear Built to Spill has some live shows coming up.
Spotify did not respond to a request to comment.
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Comments
MERCH FOREVER
By kaitlyn.tiffany on 12.07.15 11:37am
CHANCELOR BENNETT
By kobexamoh on 12.07.15 11:40am
I was really surprised to find out I listened to that much Built to Spill this year. And then even more surprised at how little money those listens actually translated into. How much did you earn for your #1 music-maker this year?
By lizzieplaugic on 12.07.15 11:37am
My CD-player doesn’t have a this song-count-statistic feature.
I only bought 4 CDs and one LP this year. Both Run the Jewels Albums and two HEALTH albums (one of it one CD and LP). That’S about 80€.
Oh, and I pledged about 40€ on PledgeMusic for the new Future of the Left Album.
By VoxMediaUser1493029 on 12.07.15 11:45am
I listened to my #1 artist about 1237 times which translates to about 10$.
Makes me feel better that I bought all 3 of their albums on vinyl this summer though.
Actually for the other 4 artists in my top 5 I bought 1-2 of their albums on vinyl.
By TheComebackKid on 12.07.15 12:12pm
Don’t forget that payout is determined first as a proportion of total revenues, and not a fixed amount. If there are more total streams (and more revenue), if the artist’s stream count has not increased in parallel, they get less $$.
Secondly, $2.24 is not bad considering (I presume), you’ll listen to them (him/her??) a similar amount next year, and so on. The major difference for artists is that revenue is paid over a ‘lifetime’ of use, rather than as a lump sum that licenses you a lifetime’s listening.
By ObviousCat on 12.07.15 11:40am
I paid one of my favorite punk/emo bands $5.70. I feel awful.
By payturr on 12.07.15 11:40am
unless they are indie, i thought music sales mainly go he the label. bands make money from merch and ticket sales.
By TorBoT on 12.08.15 11:51am
Spotify pays THE LABELS and then the labels pay the artists based on their contract.
People should stop saying that Spotify pays the artists, it’s all up to the labels.
I’m still baffled that people still think this..
By devve on 12.07.15 11:47am
Well, unless the artists own the label, this has been the case for all of history. The labels have been the ones paid for the streams, the digital purchases, the CDs, the tapes, the vinyl, and so on.
Streaming services are only different in terms of the rates at which the labels are being paid, not in the fact that they are the ones receiving the money directly, instead of the artists.
By paul.kounine on 12.07.15 11:56am
Then think how much Apple or Tidal pays out with almost a tenth of the userbase. You forgot to mention that The Verge. And yes, Apple pays pretty much the same amount to the rightsholder.
By TheLoyalist on 12.07.15 11:49am
Apple pays higher amounts out according to all the news reports. That is what they are using as a draw for the artists.
By Lomifeh on 12.07.15 8:19pm
If the artists want a greater cut of the money, they should negotiate better deals with their labels. All things considered, they’re better off than having their music pirated and getting no compensation.
By paul.kounine on 12.07.15 12:01pm
With major artists getting perhaps a few thousand per year for their work, this model is not sustainable if we want a vibrant art community.
Expecting that everyone will produce entertainment for you in their free time, after working another full-time job, is kind of silly.
People deserve to get paid when they produce quality work that is consumed. People produce better art when they can focus on honing their craft and not making lattes and updating spreadsheets.
By superberg on 12.07.15 12:46pm
That’s easier said than done and even people who have great deals with there label (Taylor Swift who owns a piece of hers) has said they don’t make any money.
By kenneth.windham.3 on 12.07.15 3:16pm
Apparently, I listened to 1 artist, "The Hold Steady", 2 "streams" (I guess songs are called streams now?) from the same album, but I didn’t listen all the way through, since I only listened for 3 minutes. That’s 200% more time spent on Spotify than the previous year.
Of course, I bought that Hold Steady album when it came out 10 years ago, so I don’t feel guilty for listening to it for 3 minutes last year.
By memebag on 12.07.15 12:19pm
So it’s not Spotify, it’s the Labels sucking the money out of Spotify and the artists. And yet, artists usually protest against spotify. And I think articles like this also contribute to this misunderstanding. Spotify is also struggling to make any money. They should really find a way to cut the middleman out for doing so little, or at least make it more proportional.
By nullpointer on 12.07.15 12:31pm
No, it is Spotify as well. Do you really think Spotify went "BUT LABELS WE WANT TO PAY YOU MORE MONEY!!" No they did not.
By Lomifeh on 12.07.15 8:20pm
By MJJitsu on 12.07.15 12:32pm
I’m old enough to remember when everyone bought albums, then cassettes, then CDs. Now the paradigm has shifted, and it seemingly takes a really special album to compel me to purchase a CD if I have access through streaming. That being said, I wonder how much different the payout is these days for royalties versus when album sales were stronger. My understanding is that performers (individuals or groups) made the bulk of their money on tours, not per unit album/CD sales. I could be wrong.
Nevertheless, it has to be discouraging for up-and-coming artists to hope to eek out a living with their craft; never mind striking it rich.
By matthewdlyons on 12.07.15 12:44pm
The thing that makes me laugh over and over again are the independent artists who argue with me that they’re making $0.04 per stream. Which would be fairly lucrative if you get a ton of streams (still terrible compared to sales of course). But of course they don’t, but they really really believe they do. They’re mostly rappers. I sign my music with the same distribution deals that they do and get the .006-.008 that is constantly reported.
By Music by David Rosen on 12.07.15 12:50pm
slightly off topic, I wonder how much Amazon Music Prime pays in royalties and their rates, I cannot find the info online.
By joey-taps on 12.07.15 1:05pm
There are two illogical leaps:
Imagine if everyone bought their albums, and that’s just not realistic. It’s an inaccurate comparison.
The real comparison is how much would the artists have made if they’d been played on the radio? The answer’s none. Oops. So that $2 is more than they’d have bagged otherwise and starts to get to a useful amount in volume.
The second is that Spotify’s responsible for paying artists. They’re not. The labels are. The artists are still getting a crap cut of the money in general, the labels take most of it even if they’re not even responsible any more for the actual logistics of getting the music to people and that’s the unfair part.
Spotify’s trying. They know there’s a world where people aren’t GOING to buy albums anymore and are trying to get money to artists for it. Vilifying them instead of keeping the pressure on the labels is not a productive thing. A few hundred streams isn’t much, and previously in the world of "should I buy this $15 CD" that would be in the realm of "Nah, I’ll just wait for it to come on the radio" most of the time. I know that now that you’re old it feels like a lot, but it sure isn’t. Complaining that Spotify isn’t making bands rich, when they’re really not getting consumed that much anyway is yelling at the messenger when the real problem is elsewhere.
By Master_Dave on 12.07.15 1:19pm
Some points of clarification: First, artists do get paid when a record is played on the radio. There is a performing rights payment which gets paid to a collecting society which remits the money on to artists. Second, Spotify pays the publisher, the publisher then pays the artist and the record label. Of course the money gets diluted between the Spotify payment and the artist’s hands, the labels have overheads to pay and they aren’t doing this for free. If Spotify pays a publisher $3 for a year’s worth of listening it doesn’t take a genius to realise that once you split that money into a share for the publisher, composer(s)/lyricist(s)/label and artist(s) that they aren’t going to make much money.
By technnosaurus on 12.07.15 2:41pm
Your argument seems to ignore independent artists who aren’t getting screwed over by their "labels." We just simply don’t make money off these services, without a 3rd party screwing us.
By Music by David Rosen on 12.08.15 9:07pm