This is how much artists on Spotify really earn

Since Spotify launched its music streaming service in 2006, the music industry and the way artists, writers and record labels are paid have changed dramatically.

A strong uproar was heard, especially from the artists, i.e. those who appear in the title of the piece of music such as singers, remixers or producers. The record companies, on the other hand, have remained extraordinarily calm and seem to have come to terms with the new situation.

So artists are being exploited by streaming services? Is the money paid for the titles played really so small that even with millions of streams only a few euros end up in the wallet?

And by the way, why are streaming portals full of oldies covers?

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The foundations of the (old) world of music

First you need to understand that a song that is distributed on TV and radio, in discos and clubs, on CD and via streaming services brings money to many different parties.

Die record label classically sign an artist and agree on a percentage fee. In pre-stream times, this was 10 to 15 percent. So most of the income remained with the labels, which in return took the risk of possibly investing in a flop. in Labels and Artists we talk about ancillary copyrights.

Of the music publisher however it has authors under contract. They write melodies and lyrics and own the Copyright on a musical work. The revenues from “public performance” (TV, radio, streaming, etc.) and “duplication” (sound carriers, sheet music printing) are distributed via collecting societies (GEMA in Germany) via publishers or directly to authors.

This is new

And now we come to the big change that streaming has brought about: whereas previously authors were paid much better for “public performances”, today artists themselves receive 90 percent of the revenue (10 percent goes to the authors).

The idea of ​​paying artists directly and thus cutting the revenue of publishers and labels has been a major concern for Spotify co-founder Martin Ek and is also featured in the Netflix series “The playlist“theme.

What often happens: the labels have remained silent and let the old contracts continue. As a result, many artists continue to receive only a fraction of the money generated.

So is it true that streaming only applies to labels and services themselves?

Becoming again and again published reports, which are meant to prove that even millions of streams lead to only very little income for the artist.

However, the important question here is: Who else has made money from music? Did you upload the music? Or is the fee part of an antiquated record deal?

Old vs new world of music streaming

Let’s calculate two simplified examples and compare them with the “old days”:

A singer has released five self-penned songs. They were streamed 200,000 times each on Spotify, Apple and Amazon, totaling one million times per portal. He has also signed a contract with a label and a publisher.

It receives 15 percent of its ancillary royalties from the label and 60 percent of its royalties from the publisher.

In total, it receives only a fifth (exactly 19.5%) of the money distributed by the streaming services Spotify and Co. The rest is left to companies that make precious little for that money and, unlike in the past, now only have to run a little risk.

Concrete sums of money can only be given approximately, as providers relate distributions as a percentage to their income. On Spotify, it’s about 70 percent. If few streaming customers pay, but stream a lot, obviously less money comes in than if many paying customers access music less often. Where you listen to music and the type of user agreement also play a role.

If we take the average values ​​per stream on Spotify (0.3 cents/stream), Apple (0.8 cents/stream) and Amazon (0.6 cents/stream), our singer would still have around 15,000 euros. If about 80 percent of that ends up with the publisher and label, it’s understandable that artists are upset.

see context

But blaming streaming services would be short-sighted. This becomes clear at the latest when one compares what this singer would earn if her songs were heard by three million people on the radio.

A large radio station like Bayern 3 broadcasts each of its five songs once in front of an audience of 600,000 listeners. With a little luck, only a few hundred euros would be collected, which would then be divided among those interested.

Geldquelle ‘Cover’

Anyone who has thought about it already knows why there are so many covers to listen to on Spotify and Co. A good cover was a great way to get an artist known. Above all, however, the authors of the original work received money.

Today 90 percent take artists and suddenly someone who sings a famous song in an original way, records it and streams it, can earn many thousands of euros with it.

Note: It is not forbidden to sing a song as long as the authors i.e. those who wrote the song are named accordingly. These authors therefore represent 10 percent of Spotify’s revenue. 90 percent, however, get the artist who sang the song.

Not enough to live on

The fact is: most musicians can’t make a living from their craft. This is not a new phenomenon. But has the fact that music can now be accessed anywhere, anytime on demand made the plight of artists even worse?

New technologies offer new opportunities. There are always winners and losers. To be among those who will benefit from the change, you should first gather accurate information to see where the opportunities and threats lie.

Anyone who thinks too conservatively and sinks into self-pity will fall by the wayside.

But if you know the flow of money and can make your music accessible to an audience of millions via streaming and social media platforms alone, you can make good money on it.

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