In absolutely shocking news, Spotify will be raising the prices for their Premium services in many territories. In other news that’s absolutely shocking (so much sarcasm here, if it wasn’t obvious), Spotify isn’t raising the royalty rates for musicians or artists in any kind of corresponding fashion, even though they’re one of the lowest for any streaming service.
The memo that went out from Spotify on the 24th reads like this:
“Since launching in 2008, Spotify has innovated and invested to build the best audio experience for you and your favorite artists and creators. We have continually revealed new opportunities for fans and creators to connect through the power of our platform, from discovery tools like our new AI DJ, to fan-favorite shared experiences like Blend and the introduction of podcasts and audiobook content.
With 200+ million Premium subscribers, we’re also proud to be the world’s most popular audio streaming subscription service, giving Premium users access to on-demand and ad-free music listening, offline music downloads, and quality music streaming. The market landscape has continued to evolve since we launched. So that we can keep innovating, we are changing our Premium prices across a number of markets* around the world. These updates will help us continue to deliver value to fans and artists on our platform.”
The fact that Spotify won’t raise the royalty rates per stream of artists and musicians on the platform is a decision that continues to boggle the mind. This is despite the fact that Spotify is, by quite a margin, the most popular music streaming service out there. Boasting over 200 million+ Premium subscribers (not to mention those that opt for the free route or access Premium by other means), a track breaking open on Spotify can do some crazy things for a musician or band in question. Many examples abound, but there’s a few recent ones just from viral data that have had a large effect.
Out of the 50 songs on Spotify’s USA Viral 50 chart right now, two of them are taken up by Superheaven’s “Youngest Daughter” and Basement’s “Covet”, respectively. Both songs have blown up via TikTok through a series of videos, and while both bands were pretty popular before, Superheaven haven’t released an album since 2015. With the added attention, it’s also bled into Spotify and other streaming services for both bands as well. In Superheaven’s case, “Youngest Daughter” has vaulted to over 17 million Spotify streams, while Basement’s “Covet” has landed at a staggering 42.5 million. Obviously, these songs connect with a wide variety of people, and their alternative rock // grunge-influenced sounds also attract those who might be nostalgic for the past. A win-win for everyone.
Spotify currently pays a rate of around $4/1000 streams, but an amount we saw here was 0.00437/stream with other things factoring in to a slightly lower or higher amount than that. Realistically, it can be anywhere from $3-$5 per 1000 streams. Assuming a payout level of the above at 0.00437 times the song’s 17 million Spotify streams, Superheaven would have generated around $74,690 with “Youngest Daughter”. Meanwhile, Basement’s “Covet” would have generated around a staggering $185,725 (at the rate of 0.00437 times the approximately 42.5 million streams the song has now). This may seem like a lot of money, and it’s not insignificant. When you consider how many members both bands have, though, that’s a lot of hands that end up splitting that money. Then you add record labels into the mix, and there’s a lot of hands in that cookie jar rather quickly. While both bands are again very sizable, even a slightly higher royalty rate would have had a significant impact in their lives. There’s also the possible matter of managers and public relations personnel that may get paid from it.
@hannah0wens Idc this is my favorite superheaven song 😤 #superheaven #superheavenband #music #altrock #shoegaze ♬ Gushin’ Blood – Superheaven
It obvious doesn’t just apply to those two bands. A few more examples include “Feel Nothing” from The Plot In You, From Ashes To New’s “Panic”, and Holding Absence’s “Afterlife”. All three of these tracks have notable intrinsic qualities, with the main one being that they’re all earworms. All three songs also appeared at pivotal junctures of the bands’ respective careers, especially The Plot In You, who have become more or less defined by the song and its success. For Holding Absence and From Ashes To New, they provided reasons that each could hit stardom. And what’s more is that for all three bands, even a slightly higher payout from Spotify revenue could have made a world of difference as far as progressing more quickly.
It could be worse, of course. The 0.00069/stream YouTube pays is simply not nice. Pandora and Amazon still pay less per stream as well. But Spotify, which is the biggest music streaming service in the world, still pays incredible low royalty rates for a company in their position. Artists of all genres, shapes, and sizes have spoken out about what they feel is Spotify’s abysmal royalty rate, and what’s really ironic is that it’s actually Napster which has the best royalty rates for all major music streaming services. If you can believe it, it’s only 53 streams on the platform for an artist to make $1.
@thevincentcole POV: Peter Parker the morning after getting bit by the spider. #gym #fyp ♬ Youngest Daughter – Superheaven
It should be known that Spotify does operate at a loss, and currently, they’ve scored a loss of almost 4.2 BILLION dollars. Their expenditures are quite high as well, but with the many millions Premium subscribers who will likely spring for the higher-priced packages, that could be a lot of income brought in. Spotify also only takes 30% of profits from the publishers. However, with still no changes in royalty payouts on the visible horizon, it’ll be the musicians and artists who continue to get shafted. While it’s true that independent content creators (especially individuals and those working without a record label or middlemen) have an easier time, it’s clear that they’re still not getting the compensation that they deserve.
@ibs_warrior69 I couldn’t unhear this so I had to make it #basement #pixies #mashup #rock #covet #whereismymind ♬ original sound – Tr*y*n