Updated for November 2020
Many artists in the music industry are jumping onto the streaming service bandwagon. If you pay close attention to how many times a song has been downloaded, you’ll be amazed by the number of streams your favorite artist has. You may wonder how much an artist is paid for their songs and if they are paid every time a track is played on Spotify. The Los Angeles music promotion company Planetary Group invite you to keep reading as we explain some details surrounding Spotify and examine whether artists get paid every time their music is played on this streaming platform.
We’ll be looking at some of the most common questions artists and musicians have about Spotify including:
- Will I get paid every time Spotify plays my song?
- How can I benefit from a Music Streaming Service?
- How does Spotify pay artists?
- How much money do you earn from 1000 streams?
- What milestones/tiers of earnings do they payout at?
- Do you need a bank account for your band to get paid from Spotify?
- What do artists need to get their accounts’ set up so they can receive payments?
- How are the rates Spotify is offering changing? Are they going up, going down, etc.?
- Do rates change as you pass certain listener milestones?
Will I get paid every time Spotify plays my song?
Whether you are an independent artist or one signed to a major label, you will likely use one or more streaming services to get your music out there for everybody to experience and enjoy. Additionally, this will help you obtain some extra revenue for your musical productions. Artists of all kinds converge in arguably the most prominent music streaming service around: Spotify. They offer the product of their musical labors, hoping it reaches ears around the world and gets as many streams as possible. The reasoning behind this is that the higher the number of streams, the better the payout and chance of more prominent recognition.
The short answer to this question is: yes. As long as the song is played for thirty seconds, Spotify counts it as a stream and a per stream royalty is added to your grand total, to be paid out later. Looking into how much an artist gets per stream is the key, as we’ll see.
In recent years there has been an outcry from many artists claiming they are not getting paid enough for streaming music on Spotify. Many artists have argued that the music streaming giant’s payouts are simply not high enough. As of 2019, Spotify reported that they pay between $0.00331 and $0.00437 per stream to artists for their songs. However, the amount of money mentioned before still needs to be split among different people. For instance, the final payout Spotify will grant the artist has to be divided among the artist’s record label (if they have one), their publisher, and other entities such as the American Society of Composers, Authors, and Publishers (ASCAP).
Recently, Spotify increased its payout per stream, but not by much. However, for signed artists this increase still needs to be split up between different parties with a financial interest in the work (publishers, writers, etc.). These amounts are still the subject of intense debate among many artists, from those tied to a contract with a major record label or those managing their own careers.
For an independent artist who owns their own masters and the rights to all their songs, splitting the royalties isn’t the problem. It’s getting those streams to rack up in a timely manner. For these reasons, the proper promotion and release strategy is of utmost importance.
To put it in perspective, an artist would need roughly 400,000 streams to earn an amount comparable to the average monthly minimum wage. Multiple sources have reported that Spotify will continue to increase their payouts as the number of subscriptions for their service grows.
How can I benefit from a Music Streaming Service?
Streaming services have become a cornerstone of the music industry. Millions of people subscribe to these services to enjoy their favorite music at the touch of a phone. As we mentioned before, the amount of money left after everybody has gotten their cut is not enough for many artists. However, there is another side to this coin that can and should be seen positively.
One of the main reasons why streaming services are so important is because they allow you to connect with millions of people. This includes people who have listened to your songs before or people who may be exposed to your music for the first time. This is an exposure you may not be able to get somewhere else.
Traditionally, other platforms, such as promoting music on the radio, can help you impact a particular segment of the populace. However, streaming services such as Spotify can give people access to the music of their favorite artists any time they wish for as long as they want. This ease of access and the amount of control the user has over their music may work to your advantage. For the younger generations of music listeners who didn’t grow up shopping in record stores, Spotify is the number one place they’ll look for your music if they happen to discover it through other viral content factories, such as Twitch or YouTube.
If you are an up-and-coming artist looking to expand your fan base and widen your popular appeal, you can’t afford to not have your music available on streaming platforms. Often, independent musicians struggle to focus on their careers while working on their artistic projects at the same time. With the introduction of music streaming services, artists can work on their projects and easily release them on these virtual platforms for the world to enjoy.
Granted, the return on investment via streaming may not be enough to live on, but it can help to boost your presence in the market. Unlike in the past when it was standard to release a new album every two years, there is no limit to the amount of content you can put out on Spotify.
Another exciting benefit of streaming your music is having access to valuable data. You can see how many people have listened to your music, giving you an idea of what needs improvement or what has been a hit with listeners. Despite intense debate regarding revenues and royalties, these digital platforms may become an important part of your music promotion efforts.
How does Spotify pay artists?
Spotify does not directly pay artists who are on their platform. You also cannot upload your music directly to Spotify. The middle man in this situation is the music distributor, such as TuneCore, DistroKid or CDBaby. These websites are the conduit between the artist and Spotify, and they are the ones who receive your royalties.
With your e-mail, create an account and then upload your songs for release. You are able to choose between dozens and dozens of well-known and barely heard of streaming services, of which Spotify is only one. Spotify allows for songs to be released a week or so after uploading, but that’s considered rushing it. Most artists plan their release carefully and upload the songs two or so months in advance so they can take advantage of pre-order promotion and releasing a single before the whole album comes out.
How much money do you earn from 1000 streams?
With the average per-stream rate going at roughly $0.0038, 1000 streams pays around $3.80.
What milestones/tiers of earnings do they payout at?
There are no milestones or tiers that Spotify pays out at, instead, your distributed is updated with a report of your streams every 6-10 days. The number of days varies in an irregular way, but it never exceeds ten. So just about once a week you receive through your distributor a record of how many streams/purchases your tracks received, where the interactions came from by country, and how much they racked up. It also updates your royalty total, which can be withdrawn via your preferred method.
Do you need a bank account for your band to get paid from Spotify?
No. Although it is much easier to receive your royalties as a direct deposit into your specified bank account, distributors such as TuneCore make their payments to artists using Payoneer, which has four options to payment: PayPal, Direct Bank Transfer, Pre-paid Mastercard, or a paper check for those without a bank account (in the US and Canada only). Payoneer charges a $1 fee for processing your withdrawal and making the payment.
What do artists need to get their accounts’ set up so they can receive payments?
If you’ll be requesting a check, all you really need (besides your uploaded music being listened to) is an email address to register an account with TuneCore or DistroKid. For direct deposit or PayPal, you need your checking account information, bank card, and sometimes your address handy.
How are the rates Spotify is offering changing? Are they going up, going down, etc.?
Spotify reports their per-stream royalties as having gone up over the last few years, and they have. But when we’re talking about hundredths of a cent, it’s hard to feel the effect unless you are getting massive viral streaming numbers.
Do rates change as you pass certain listener milestones?
No. Spotify claims that all streams incur the same face value royalties, but artists such as Beyonce and Taylor Swift have claimed that as their numbers went up the payment rates went down due to streams that came from non-subscribed free listeners. After taking her catalog off Spotify in 2014, she returned to the platform a few years ago.
Music Promotion Company Serving Independent, Local, and International Artists in LA
The Los Angeles music promotion professionals at Planetary Group understand how the music business works and can help you design an effective promotional campaign for your next project from consulting to online music promotion. Thanks to our many years in the music industry, we can build strategies tailor-made to fit your needs. To learn more about all of our services and how we can help you with your next release, call Planetary Group today at (323) 952-5050.