Spotify has been available in Australia for more than a month, and everyday more and more people are joining the incredibly convenient music service. Many ask themselves, is this fair to artists? How much do they get paid? How is my $12 per month going to be distributed among 40 artists that I listen to weekly? I decided to do some research and here are some interesting things I found:
Major record companies such as Universal, EMI, Sony etc… have been given a great deal while indie labels give up what they have for less in order to grow. Royalties for artists that are signed with major labels are $0.03 per play. Meaning for every 1000 plays, Rihanna gets $30, I’m not joking. Comparing that to indie labels and unsigned artists who get $0.007 I think Rihanna is doing pretty well (that’s $30 vs $7 for 1000 plays on Spotify)
You might think that’s too little but you’ll be shocked after you read the next paragraph.
As we all know radio stations pay royalties to artists and labels for playing their music, it’s not like they buy it and just keep playing it without paying again, right? Here is what I found:
A major radio station in U.S pays $0.000186 to $0.000372 per listener for one spin of your song. So if there are 20,000 people listening to the radio, for 1 play of Justin Bieber’s song he gets a max of $7.44.
Now compare that with Spotify which will earn him $600, I think he’s getting a pretty good deal, don’t you think so? (20,000 x $0.3)
You might say this is good for famous artists who are signed up with major labels but think of it this way, an indie label (or even unsigned bands) have to beg radio stations for months to get their records played. However on Spotify users listen to new material because of the convenience and the fact that they’ve paid the maximum amount they have to pay.
Stick around, next week I’m going to compare ‘having your music purchased on iTunes or licensing it to Spotify.’