By Alex Gryciuk
With over 165 million premium subscribers and 365 million active listeners, Spotify, the company rakes in a whopping 15 million dollars a month. In addition, the company makes a significant amount of money mainly through $9.99 monthly premium fees and advertisements. However, the artists that fund the app’s popularity, get the short end of the stick. Artists on all streaming platforms make a significant portion of their money from streaming services: a direct result of lowered albums sold. While shareholders have made 21 million pounds since the start of Spotify, artists are forced to live off of small wages. Most, if not all streaming services including Spotify, pay their artists on a Pro Rata system. To put simply, artists are paid by however many streams their music receives in a system that splits up money earned by streams compared to other artists on the platform. For Spotify, each stream on average earns $0.00397: a dramatic drop from previous years. In 2014, Spotify paid artists an average of $0.00521 per stream. The number dropped at least 24% since 2014, so much so that in 2021, it takes 250 streams to make $1.
There are a couple problems with Spotify’s low prices. On the Pro Rata system, the artist is supposed to get money from the number of streams. However, this is not usually the case as artists usually have record labels or managers that take a percentage of the money earned. So, aside from the fact that artists don’t make much money from Spotify, they don’t even get to keep the full amount they earned; their record deal takes part of the earnings. However, pay distribution is not selective to Spotify as Spotify pays significantly lower than its leading competitor: Apple Music. Apple Music pays its artists about double the amount that Spotify does. Apple Music pays close to one cent per stream, a significantly higher price. If Apple can afford to pay more money to artists that make the platform successful, Spotify should also pay artists too.
With a system that abuses their artists, Spotify surely doesn’t pay them enough for their artistic services dedicated to the platform. Spotify, do better and pay your artists the correct compensation for the work that fuel your platform.