Many Spotify users have been wondering this, and we are glad to answer just that. Because of that, Spotify made Loud&Clear, a whole webpage where you can read about the revenue plans and how they work. Here they share information about how the streaming services work and how they give opportunities to every artist.
How can an artist get paid by using Spotify?
As an app, Spotify gets its money from premium subscribers and ads in the free tier of the app. However, most artists get their money from the ‘royalty pool’ or their money from rights. According to the webpage, they paid over $5 billion to their number one; in other words, every single one of them made a lot of money.
Also, they divide the royalty pool based on the rights and many other things that the app keeps in the count. One example is that the subscribers don’t pay per stream; they pay a subscription fee for access. We will leave a video that explains this more deeply because it’s not so easy to understand.
Spotify money revenue for dummies
Ok, what we said before is hard to get, and the video or the webpage isn’t so easy to get. So, we will explain a little bit deeper how the system works. Apparently, in August 2020, Spotify was paying in royalties $0.003 to $0.005 per stream. This isn’t the highest rate, and we know, but it can get very big, very fast.
Also, the number might change depending on multiple factors – like the exact location you are while you listen to music, your account type, agreements with the artist, etc. However, music streaming services are growing, and their policies are changing, which means this might be growing and changing soon. Keep in mind that number one in Spotify can get to those $5 billion we mentioned.