Can Artists Earn A Living By Putting Their Music on Spotify?

Spotify is one of the biggest music streaming platforms in the world right now. With 155 million people utilizing its premium subscription alone, it’s safe to say that the company is in no shortage of money. Knowing this, you’d think that they would have figured out an efficient way to compensate the creators on the platform – but looking at their statistics might just prove that assumption wrong.

Toward the tail-end of 2020, Spotify had announced that one of their main goals was to provide artists a way to earn a living from posting on their platform. In their own personal statement, Spotify went as far to say that their core mission was to provide “a million creative artists the opportunity to live off their art”. Let’s take a look at their tactics in achieving this mission, and how well they’ve been able to live up to it.

So, how are they paying artists?

According to Business Insider, Spotify artists are paid monthly after tallying up the number of streams for the artist, and after deciding who owns each song and who distributes it. A 52% share of this money is sent to the record companies and labels who own this money, and 10-15% is given to the publishers and producers of those songs. In a statement from Spotify’s own investor site, we know that 90% of Spotify royalties go to their top-tier, which is approximately 43,000 artists. By Rolling Stone’s calculations, “that’s $22,395 per artist, per quarter,” or just shy of $90,000 a year.

That means that all artists receive good compensation, right?

Not quite. These artists make up the top 90% of Spotify’s streams, yet most (if not all of them) are already artists that are world famous. These superstars have other means of earning money (album/merchandise sales, other streaming platforms, concerts), so in the long run, smaller artists are left out in the dust if they don’t make “top tier” status.

Rolling Stone did the math here on this one, too, and discovered that this other 10% of artists only earned $36 dollars per quarter – or $12 a month.

Knowing this, it seems like in order to make a substantial living off of Spotify (even if you’re a smaller artist with a significant amount of streams), you’ll need to enter this elite “top tier” – which could take a long time. With the amount of artists on the platform (as of a statistic from 2018, 3 million artists), it should be way more easy to earn top tier status. Especially because there are only 43,000 artists currently included in that category.

Well then… is Spotify giving “a million creative artists the opportunity to live off their art?”

Not as of early 2021. In light of recent pandemic events, you’d think that Spotify would want to provide a more efficient, easily attainable way to earn a living on the platform – especially for smaller or lesser known creators. These days, there have even been some discrepancies with larger artists and getting the compensation they’ve earned! Unfortunately I don’t think we’ll be seeing a change in the way Spotify pays their artists any time soon. But until we get there, go listen to some music from smaller artists, and help them get the compensation that they deserve!