- Spotify: “how much money goes to artists and songwriters depends on their own contracts”
- Many tracks on Spotify don’t generate royalties, and it favors big artists
- There are still ways to support artists directly, though
Spotify is getting annoyed with artists accusing it of hoarding all the money from streaming music. Speaking to our colleagues over on MusicRadar, it pointed a finger at the middlemen that sit between Spotify and the artists themselves.
Spotify has got a point: there are lots and lots of people taking often very large cuts of the money before any of it reaches the artist. But Spotify is also being a bit disingenuous here, because middlemen or not it doesn’t pay a single cent for most of the songs you can stream from its service, and while its overall payouts are enormous, the lion’s share goes to artists who are already huge.
I’m a broke musician and I make more money from a single Bandcamp sale than I expect to make from any streaming service this year. If you want to support artists, streaming isn’t the way to do it.
Where does the Spotify money actually go?
Spotify’s statement was partly in response to Gavin Rossdale, who said that “we know that Spotify barely pays. And whatever they do pay, the record companies make sure they sign off most of it before it goes to the artist.”
Writing to MusicRadar, Spotify said: “As Gavin correctly points out, streaming services do not pay artists or songwriters directly. They pay rights holders, who in turn pay artists and songwriters based on their individual agreements. Once that revenue leaves a service like Spotify’s hands, how much money goes to artists and songwriters depends on their own contracts with their rightsholders.”
That’s absolutely true, and if you imagine streaming revenues as cake then there are many people stuffing their faces before the artist gets whatever crumbs are left. The music business is infamous for its ability to bring in huge amounts of money without giving very much of it to the talent. But while the streaming cake is huge, most of that cake is given to the very biggest artists via their record companies while many artists don’t get offered any crumbs at all.
The music streaming services don’t pay artists directly, and they don’t pay per stream. After they’ve taken their cut of your subscription fees – typically 30% to cover operating costs and profit – they then pay out royalties based on market share. Spotify explains it here: “We calculate streamshare by tallying the total number of streams in a given month and determining what proportion of those streams were people listening to music owned or controlled by a particular rightsholder.”
That’s great if you’re Taylor Swift or Kendrick Lamar. But it’s not so great if you’re a garage band just starting out. Since 2024 Spotify has demonetized songs that don’t get 1,000 streams a year – by some estimates, 86% of music on the platform. As Air Herstand explained in Variety, “an artist with 20 songs at just under 1,000 streams each would earn around $60. Now that artist would earn $0. $60 is not life changing, and it’s also not nothing.”
What that means in practice is that the very biggest artists are doing very well from streaming: rates of around $0.0031 per stream may seem small, but when you’re Taylor Swift – the first female artist to reach 100 billion Spotify streams – that’s a ton of money. But the very smallest artists aren’t making much money, or any money at all.
If you care about music and want to support artists, the best thing you can do isn’t to stream them. It’s to buy from their Bandcamp, especially on Bandcamp Fridays when all your cash goes to the artist. It’s to buy their merchandise. And most of all, it’s to go to their shows.
All of these provide real money more or less directly to the artists, and so help to make sure that they can keep providing you with new music in the future. There’s no guarantee of that through streaming alone.
If you love a band, don’t just stream them. Go see them.
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