How many artists actually make bank on Spotify?

How many artists actually make bank on Spotify?

Notice:

  • 60,000 songs being uploaded to Spotify every day

  • DIY artists released 9.5 million tracks per year

  • there are 8 million artists on the platform

Payment:

  • Spotify announced 2020 that they paid out more than $5 billion for all artists

  • 4.5 billion therefore went to 57,000 artists

  • 7,500 artists made over $100,000

  • 800 artists received $1 million or more

This shows that it is practically impossible for DIY artists to generate revenue through Spotify.

Who has more than 50,000 artists in their library?

We all give the same well-known artists our money. This shows that it is practically impossible for DIY artists to generate revenue through Spotify. Unfortunately, this is no different on any other platform. The 80:20 rule (maybe even 90:10 rule) applies everywhere, even on Bandcamp, Qobuz, Indiago & Co.

Major and independent labels make the money.

DIY artists have an expensive hobby and, with luck, live performances that pay something.

Those stats (assuming correct) are unreal and thus why I have a such a problem with the streaming model in its current form (always have). It really dumbfounds me that the mindset of many is “I don’t care I get a gazillion songs for free”.

The current streaming model is in some ways no different than the days of the old napster.

To be fair, I understand that streaming isn’t going away and is the platform + ecosystem to consume music for 99.9% of people. Us audiophiles / music-philes are 0.001% of music consumers and of those audiophiles, probably only a even smaller portion choose not to stream at all and or use local library with streaming sprinkled in.

If one understood (or cared) what it takes to create an entire album from start to finish, they would maybe (hopefully) feel differently about how artist are compensated. Now without going way OT and certainly expressing my “IMHO” view, there’s differences between how some albums are created e.g. some hollywood pre-made recipe marketed push button auto-tuned fake BS v.s. a band, real musicians, I guess more traditional method and or moving parts as it where.

Certainly, music is music and regardless of the aforementioned method of recording, it isn’t any less important to those who consume it and going down that road is a rabbit hole and not my point, which is, that the amount of time, money, logistics, emotion, blood sweat and tears etc…it takes to make an album is significant. I mean would anyone be OK with going through that entire process and getting a check from spotify for a penny? For many its their job their livelihood.

I wish the artists as a collective were part of setting up streaming from the get go in so far as their compensation is concerned. I also understand its a business and there is a lot to this, especially with ownership of masters, credits, writing credits, contractual obligations and on and on…What T. Swift did with her library was unbelievably brilliant, re-recording everything under her ownership.

Hopefully someday soon, a platform for the artists, by artist will emerge.

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Same as it ever was…

The problems we have with the streaming model are rooted in our past behavior. Our beloved habits are subject to change, which is not only seen in a positive light. That’s understandable if it wasn’t your own idea to change it that way.

A passionate collector with increasing age is no longer able to appreciate his treasures. We can look at a lot of things, keep them clean as usual, but later as retirees we can’t put everything on the turntable again. We look back happily decades and do not want to repeat only old. We also need new things!

Many have therefore decided to digitize or to purchase CDs. So everything that was already successful on the market in vinyl was sold again digitally. Who likes to buy an album three times? With the later download therefore the single sales to the iPod dominated. It was only the particularly beloved singles that reached new electronic devices.

With the expansion of the network, digitization led to illegal usage strategies in file-sharing networks. At their peak, up to 80 million people were active there. By comparison, Apple alone had built up a functioning market with 800 million customer accounts just a few years later. This succeeded because many found digitization too much of a hassle for the emerging mobile players. 90% filled their iPod legally when there was something to buy. Steve Jobs fought paid streaming, which was already emerging at the turn of the millennium, with all means. Like illegal streaming, this behavior was sanctioned by the courts and destroyed a healthy market development.

Vinyl and CDs had provided for the paying masses. However, it is and always was only about 10% of humanity that spent at least €10 or $ monthly on this hobby. The market strategists who sell or rent us music know this. Today we find significantly more customers with more than one subscription, than in the past buyers with two identical LPs or CDs.

This spending took place first with vinyl, then with CDs, and finally as downloads. More than three times this business could not be organized with most buyers despite new recordings and samplers and it shrank very fast not only because of illegal downloads.

A very small but active group of buyers mainly wanted better quality already known but newly presented music primarily in old styles. The monthly trip to the concert was part of the rhythm of life before Corona and Brexit. Today, it is not only British artists in Europe’s creative industries who suffer from this lack of business. Free world art is more successful and marketable to a greater degree.

The daily and ordinary tootling in the background or with small earplugs slowly lost the mass market. For many, what came out of the inexpensive (car) radio was enough. For the vast majority, it was still: Subscription no thanks!

Popular music became a concert business and suffers from the corona crisis and foreclosure. To ensure that the billion-dollar business can continue to flourish in the future, a fourth pillar of distribution was invented, and not only in the music industry. We no longer own anything, but pay for consumption. Those who cultivate ownership as nerds continue to find their old offers and Roon perfects the connecting lines with an additional business idea in the niche, for which we pay another €10 and prefer to integrate both or even more services. However, only minorities ever make the billion-dollar business and the aging buyers with large collections of their own are slowly dying out. In fact, this is also far too rare to ever create a broad market. The artists would then have even less in total.

With 8 billion people, even today we find only about 1 billion people regularly streaming monthly. Half of them are only advertising-based without a subscription. For a fee, there are also thousands of songs available offline and on mobile. That’s the trick. You still can’t listen to everything, but the illusion lives and it tempts you to subscribe. The crucial market for music creators has been transformed from a buyer’s market to a billion-dollar tenant and concert market. The niche practically worthless in the overall view of the market players. Instead of buying the 20 million songs from 2 million artists, funds are focusing on the 800 artists, paying triple-digit millions in individual cases to keep profits from skyrocketing.

Streaming has made the market rich, not broken, but the distribution is not right!

Artist collectives have not yet managed to build platforms themselves. Tidal has passed on to the next billionaire. Will MQA bring the breakthrough? Certainly not, niche as ever.

In the tenant market, Spotify has achieved market leadership by purchasing technology, and the competitors are looking for strategies to improve their market position. Cannibalizing the very small high-priced niche seems like an act of desperation. Google is now growing faster with a different strategic focus and is looking for its place on the winner’s rostrum. That makes Apple and Amazon nervous.

The attempt to turn an even smaller group of artists into millionaires with exclusive deals has failed. The film people will also realize that. Money in the hundreds of millions per artist catalog is a waste. The small-scale payment in streaming more successful. The pie is only getting bigger through streaming. The demand of the artist majority for fair payment must be met even better.

When 1000 artists will soon be making millions and 10,000 artists $100,000 through Spotify alone, there is no other way around it. That’s where the market is. The niche is ancillary business, where a few cents can turn into a few hundred under lucky circumstances through specialty services. Soundcloud, Bandcamp, Qobuz or Idagio are even less able to pay 1.8 million artists so that all have a sufficient income.

Of course, Apple, Google, Amazon or Spotify have looked at these small companies and checked whether there is “business” in them. But the interest is more in technology. The mass of artists is lost on any platform and, unfortunately, we don’t really care. Just two or three dozen bandcamp profiles in the Roon niche says it all! Look at the number of your artists and you can judge what never reached your ears.

We can’t, won’t and won’t build our own libraries with 2 million artists.

Every artist just has to pay attention to his strengths and weaknesses and choose the platform that will not make the artistic hobby too expensive. Without a platform, things will only get worse. The size of the platform and the market power is one of the deciding factors for visibility. The majority have decided to just be everywhere and that seems to me to be smarter from an economic point of view. This is exactly the path Taylor Swift took. It was smart to make a lot of noise beforehand, because you want to be seen and heard.

There are also artists who only play live and sell recordings or memory sticks at concerts. But this can only be done successfully with fellow artists in the local loyal fan base.

Yes this amount of time, money , logistics, emotions, blood, sweat and tears, etc. … Is important, but success and payment is not guaranteed. The high quality production requires a large professional team that extends into the marketing of the major streaming services. Contacts with film and television are essential for survival. If you don’t want all that, you still have your beloved art, which is only shown privately or even publicly. If there are customers for it, platforms will help rather than hurt in marketing.

Translated with DeepL Translate: The world's most accurate translator (free version)

The problem of fair payment to artists is probably more complex than some people have it.

Let’s just take the (world) hit “Am Fenster” by the group City, which has been sold over 10 million times.

The song is 40 years old and still earns over €10,000 a year for the state of Saxony. The state inherited the lyric rights because the poet had no heirs and wanted it that way.

The album is certainly no longer sold today, but only played on the radio or streaming services for a fee. The bulk of European/German revenues today comes from Spotify, followed at a very long distance by revenues from Apple, Amazon and Google.

Surely this old eastern band will also get something out of it?

No, they gave up their rights far too early for exactly 1050 Ostmark and never saw another cent from 10 million sales.

Today, it’s the rights holders who earn from streaming, not the artists or platforms.