As long as those hypothetical non-listeners didn’t cancel their subscriptions, and money kept rolling in to Spotify, that one play could earn 100 gecs millions of dollars, because it would entitle them to the whole pie. To understand why per-stream payments can be an unrepresentative metric, imagine no one streamed anything on Spotify for all of 2020, except for a single person who played, say, 100 gecs’ “Money Machine” a single time. A single stream does not entitle a musician to a payment of some fixed amount it entitles them to a slightly larger piece of the total rightsholders’ pie. That huge pile of money is then divvied up to artists (and their associated labels and so on) according to their stream counts as a fraction of the total streams on the platform for a given period. and globally, projected a total revenue between roughly $9 and $9.5 billion for 2020 in a recent letter to shareholders, which would make the total rightsholders’ take something like $6 billion for this year. Spotify, the most popular platform in the U.S. But while these tiny per-stream payments are a useful concept for identifying the problem, they’re not particularly useful for solving it, because they don’t reflect the mechanism by which the platforms actually distribute money.Īccording to a detailed survey of streaming payments by the music industry analytics company Soundcharts, streaming platforms pay out roughly 60 to 70 percent of their annual revenue to “rightsholders,” a group that includes musicians, record labels, songwriters, publishers-anyone who has a financial stake in the sales of a given record.
A seemingly obvious fix would be for the platforms to simply increase this number.
Artists receive, on average, a small fraction of a cent for each time one of their songs is streamed on a major platform.
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