Meaning the cost is starting to lower," said Sharlea Brookes-Keyes, manager for Boston rapper Vintage Lee. "Now that there are more distribution outlets, that sector of the industry is starting to scale. Bigger artists signed to major labels go through an in-house process. Independent artists and their managers typically use distribution services like Tunecore or Distrokid to get their music onto Spotify. They help set you up and walk you through how much you're being paid per stream, and the royalty payout process," Pain said. "Each DSP has its payout, and it's your distribution company's responsibility to get the correct payout. Next, the distributor is paid (this may be the same as the rights holder in some cases). When Spotify pays artists, they tally the total number of streams for each of an artist's songs, and determine who owns each song and who distributes it. Spotify royalties are specifically distributed from the net revenue collected from ads and Premium subscription fees.Īrtists are paid monthly.
Royalties are the payments that an artist earns from streams. Spotify royalties are different from traditional royalties in how they're collected and distributed for musicians. By 2017, the average pay rate had been reduced again to around $.00397, according to artist-rights site The Trichordist. In 2014, they paid $.00521 on average, but two years later, the average rate dropped to $.00437. This hasn't always been the case - Spotify's payout rates have changed over time. "This is why rappers make their money through merchandise, endorsements, and features," 27-year-old New Jersey-based rap artist Brandon Pain told Insider. Translated, you'll need about 250 streams to earn a dollar. Yet, Insider found that Spotify has paid artists as little as $.0033 per stream, with other sites reporting upwards of $.0054. With that part of their income declining and in the face of industry-wide shutdowns on live events, music streaming revenue has become even more critical for artists. And if physical sales weren't struggling enough, the RIAA also reported that the pandemic decreased revenue from physical products by 23%. A single stream is worth less than a penny on Spotify.Īccording to the Recording Industry Association of America (RIAA), paid subscriptions have taken the place of album sales.
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