Music streaming is more convenient and less expensive for the users of the streaming services. For the music streaming company it is beneficial as well. However, when it comes to the artists and the music they produce, it is less beneficial to them.
Taking a look at the amount artist make, we see that artists make:
- Pandora or Sirius XM = $0.0023 per song play.
- Spotify = between $0.006 and $0.0084 per song play.
- iTunes Radio = $0.0014 per song play.
Breaking things down and looking at the chart below from 2014, we can see that Spotify’s revenues went up, whereas the amount of royalties paid out the the artists went down.
When we take a look at the statistics of Spotify from January, 2014 to December, 2014, we see that in January 2014, an artist receiving 10,000 streams made around $90. In December 2014, an artist making the same number of streams made around $74. The decrease of the amount of money make is about -17%. Because of this drop in the royalty rate and the amount paid out to artist, if an artist wants to earn the same amount in December as they did in January, the artist needs an extra 2,131 streams.
(via digital music news)
Spotify claims that the amount of royalties they pay out continues to climb, however this does not necessarily mean that artist are making more money. There is the fact that more and more artist are putting their music on Spotify, so royalties are being spread out. There is also the fact that the amount of royalty paid in going down.
I believe artist put their music on Spotify not to make money, but to get their name known. Then they can turn to alternative methods, such as concert, merchandise, etc. to make their real money.