Spotify: How much money do artists make streaming music on the platform?
Artists are reportedly paid a fraction of a cent per stream
Spotify has been put under a microscope in recent weeks after Neil Young inspired a handful of artists to remove their music from the platform.
Young, 76, and his colleagues have yanked their tunes in opposition to coronavirus-related content published via comedian Joe Rogan's podcast, which is exclusive to the streamer.
Young has so far been joined by Joni Mitchell, Graham Nash, India.Arie and Nils Lofgren.
With some major names following in Young's footsteps, questions have arisen regarding just how much these musicians stand to lose — and just how much they made in the first place.
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While Spotify has not publicly shared how much artists get for streaming music on the platform, Business Insider reports that the streamer shells out $.0033-$.0054 per stream — meaning a song could have to be streamed three times for an artist to make a penny.
This figure was somewhat corroborated by Arie, who accused Spotify of "paying musician a fraction of a penny" on Instagram when she announced her departure from the platform.
However, low payouts don't have a negative effect on all artists, as Top Dollar published a 2021 "Rich List" for the streamer, pointing out that rapper Drake earned an estimated $52.5 million from the platform with a total of 21.5 billion streams.
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J Balvin (15.5 billion streams) reportedly made $37.9 million, Post Malone (15.3 billion streams) reportedly made $37.5 million, Bad Bunny (14.8 billion streams) reportedly made $36.2 million and Ed Sheeran (14.7 billion streams) reportedly made $36 million.
Similarly, the outlet reports that Sheeran's "Shape of You" earned the singer-songwriter $6.5 million alone. It was reportedly streamed 2.7 billion times.
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In 2020, Business Insider reported that streamers like Spotify use a system known as "pro rata" to determine how much to pay artists, which they said sees "all the money generated from listeners each month is totaled up, then divided proportionally by listening time in order to determine how much each artist on the service should be paid."
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In a video explaining how artists are paid produced by Spotify, Alan Galbraith of the company's licensing department says "stream share" determines an artist's payday.
"One way to think about it is to think about divvying up a pie," Darren Schmidt from the streamer's legal team says in the clip. "For instance, if there are a million eligible streams in a month, and you have 100,000 streams in that month, then your stream share is 10% of the revenue pool, or pie."
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Paydays can also vary based on whether an artist is associated with a label and whether they wrote the song.
Reps for the streamer did not immediately respond to FOX Business' request for comment.