HOW ARTISTS GET PAID BY SPOTIFY

Spotify offers a certain level of transparency in how it pays its artists on one of its secondary websites, ‘Loud and Clear’. Here, the service employs slick graphics to crunch numbers and showcase how they distribute their money and how much the artists who use the site can generate from recording royalties.

By removing any additional context from the numbers they share on Loud & Clear, Spotify can make it appear that the artists using the site are doing incredibly well in terms of how much they make per stream.

When looking at the site, there are several clickable bubbles with figures on them ranging from $1k to $2m+. I clicked on the $1k bubble. From this bubble ballooned a chart revealing how many artists had catalogs that generated over $1000 in recording and publishing royalties. According to the chart, 203,300 artists made over $1000 on Spotify in 2021, a 120% increase from 2017. That sounds very impressive, right?

But take into account the amount of artists and creators who actually have music on Spotify. The exact number is hard to find online. From my research I found numbers ranging from 8 million to 11 million artists as of 2022. But let's assume that it's 8 million. Of that figure, 2.5% of artists make over $1000. As you run through the bubbles on Loud & Clear, the higher the figure the smaller the amount of artists making said figure or above. So if you are even a member of the 2.5% of artists who make $1000 from the site you are one of a lucky few.

Spotify pools its users' subscriptions together in a market-centric payment system.

That money is then divided by the total number of streams within that market and establishes a price per stream.

So, if you are an artist or a record label with a large amount of streams, you will make more money from this type of payment system!

Spotify is partly owned by three of the biggest music labels globally: Universal Music Group, Sony Music Entertainment and Warner Music.

If Spotify and these labels are entwined in a symbiotic relationship, the success of one depending on the success of the other, surely they will each do what they can to benefit the other? 

If you were designing an algorithm for Spotify with this in mind, would you develop one that encouraged the streaming of songs produced and owned by these labels? Knowing that the more money they made through streams, the more money Spotify made in return? 

Spotify has its own official playlists, including 'New Music Friday', 'Release Radar' and others that are divided according to genre. If you are someone who is trying to make a living as a musician, getting your songs onto these playlists can act as a sign that you are being noticed and can open new audiences up to your music.

But look at this chart, one of several put together by Hypebot to chart just how dominant the major labels are on these playlists. This chart looks at where the tracks that made the 'New Music Friday' have come from over the last four years.

29.86% were tracks from Universal Music Group.

19.13% were tracks from Warner Music Group.

19.12% were from Sony Music Entertainment.

The rest of the chart is comprised of music from other music distribution companies. A lot of independent musicians use Distrokid to distribute their work, in part for its low cost and for its easy-to-navigate interface. Distrokid distributions made up 1.34% pf the songs that made it onto the 'New Music Friday' playlist in the last four years.

Spotify does not pay artists directly. Rather, they pay the record labels and distributors in monthly royalty payments. On the FAQ section of their artists' site, Spotify are very intent on saying that what the artist is then paid for their music is based on the agreement they themselves have established with their label or distributor and nothing to do with Spotify themselves.

The way Spotify distributes its subscription fees is actively detrimental to any independent musician who wants to put their music on there. But what happens if you don't? Whilst removing your music from Spotify or never putting it on there in the first place is an act of defiance against not just the way the platform treats independent artists, you are also stepping away from using the most popular of the streaming platforms. How can artists engage with larger audiences, get their music out there, achieve accessibility and simultaneously not shoot themselves in the foot? This is a question we need to keep returning to I think. There has to be something better. There needs to be something better.