Today we will take a look at how much artists can earn from Spotify. Read on to learn about the average pay per stream and how royalties work. We will also discuss why having your tracks on Spotify is worth it, even considered the low payout.
How do royalties work?
Spotify pays artists royalties based on net revenues from the subscription fees from subscribers and ad revenue from free users. For every stream, you’ll earn a small number of royalties that the company pays each month.
If you’re using a music distribution service or a label, they will take a small percentage or a flat fee of the earned royalties. If you don’t own the rights to your music, Spotify will pay the people who do.
How much does Spotify pay per stream?
Spotify doesn’t have any official documentation on how much they pay for each stream, probably because many factors come into play.
Based on research we found that artists get paid somewhere between $0.0032 and $0.0054, and the current average payout is approximately $0.004 per stream. It’s safe to say that’s pretty low compared to the average pay per stream on other streaming platforms. Spotify has received a lot of criticism over the years for its low payout. Here is the average pay per stream from other huge streaming platforms:
- Apple Music: $0.00563
- Google Play Music: $0.00551
- Amazon Music Unlimited: $0.01196
To put things into perspective, for 1 million streams on Spotify you could earn somewhere between $3,200-$5,400, and you’ll need about 250 streams to earn a dollar.
The minimum wage at the federal level is $7.25 per hour ($15.080/year). If you earn a higher-than-average rate per stream, you’ll need approximately 2,792,593 streams per year.
Your earnings from Spotify depends heavily on:
- from which country the stream comes from
- if the stream comes from a paid or free account
The highest earnings per stream come from countries like Norway, Denmark, and United Kingdom. Argentina and Brazil have the lowest pay per stream because of the small amount of paying subscribers.
Why you still should consider Spotify as an artist
Spotify has by far the biggest market share of all music streaming platforms, owning 34% of the overall market. According to Spotify’s website, there are 158 million paying subscribers and 198 million free users. Spotify gives you as an artist the potential to reach millions of people with your music. You can also encourage your audience on Spotify to follow you on social media, SoundCloud, or Youtube.
Spotify could act as a way to promote your music and their playlists can help you reach potential fans. To reach as many potential fans as possible, artists should get their tracks into as many relevant playlists as possible. Adding your music to a playlist and getting it featured might result in hundreds, if not millions of monthly listeners.
How to increase your earnings from Spotify
There is a couple of methods you can use to increase your earnings from Spotify. The first one is pretty straightforward: upload as much music you can. This probably won’t increase your average pay per stream but it’s a great way to build your fanbase and increase the number of streams.
Another method is to focus your marketing efforts on countries where the pay per stream is significantly higher than average. Countries like Norway, Denmark, and United Kingdom have a huge amount of paying subscribers which increases the average pay per stream.
If you’re able to distribute your music by yourself, without any labels or distribution services, you as an artist can collect the entire streaming revenue from your tracks.