Spotify Royalties

There has been a bunch of controversy over how much artist receive in royalties on the music streaming site Spotify. Before researching I thought that artist received a certain amount of money per play but this is not the exactly case. According to the Spotify website, they divide the artist streams by the total streams Spotify receives to determine the percentage the rights holder should get paid. (Which is usually 70%). The royalties specifically go to the writers and producers of the song. After they are paid, the record label or writer pay the artist based on the royalty rate that is in the artist’s contract. As for independent artist, they receive 100% of their royalty payouts. In other words, Spotify has no control over the percentage signed artist get from the royalties made on their site.

Spotify has claimed that they have paid $1 billion dollars in royalties to date. In 2013 specifically, they have paid rights owners $500 million. This shocked me because I did not think Spotify was making that much money. Spotify uses the money they make off their subscriptions and advertisements to pay off royalties.

So we can’t really blame Spotify if an artist doesn’t get that much money off of them. It really is based on popularity and their contract. The more streams the artists generate, the more money they will receive.

One comment

  1. This is an interesting topic I think not many people think about. The issue is that artists don’t seem to be receiving much of the revenue from the royalties. I always thought Spotify would pay the artist directly and after finding out that the producers and writers split the revenues with artists I realized how little these musicians are really getting paid for their work. Time magazine says, “Note that these are the total royalty payments split between record labels, music publishers, songwriters and artists. It’s not clear exactly how much money goes to artists, but in older distribution formats, like CDs and iTunes downloads, artists often pocketed less than 10 percent of the retail price.” I think this topic relates to copyright in the sense that spotify has to decide who the legal right owners of the songs are and how would the revenue be distributed. In a way it seems unfair that artists receive a portion of the $0.006- $0.0084 average right holders receive. However, the recording artist created the song with the help of producers and song writers and the label so it is a team effort. At the same time I wonder if having websites like Spotify overall help the artist even if they are not getting paid. People can hear the artist music for free and it could be seen s as a way to increase the popularity of the artist.

    Read more: Spotify Reveals Royalty Rates Paid to Artists | TIME.com http://business.time.com/2013/12/03/heres-how-much-money-top-musicians-are-making-on-spotify/#ixzz2uBeGTx2u

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