How Much Do Artists Make on Spotify? A Guide to Royalties, Payments, and Streaming Income

In the ancient days of music on the internet, finding high-quality tunes to listen to was a long and laborious process. It was quite tricky for musicians to upload their songs and find an audience, and it was also difficult for audiences to find their favorite songs.

These days, though, both sides of the coin are quite streamlined and easy. However, while major audio streaming and media service providers like Spotify have solved many of the problems surrounding online music streaming, it’s far from a perfect solution.

If you’re wondering, ‘how much do artists make on Spotify,’ or are curious to learn more about how Spotify works regarding artist royalties and perhaps explore more tenable music licensing for video options, let’s give you a quick primer on the pros and cons of streaming music giants like Spotify.

How do royalties work on Spotify?

For artists streaming on Spotify, royalties work in a couple of different ways. Of course, these are always subject to change, but as it currently stands, here are the two main types of royalties available to artists streaming on Spotify:

Recording royalties: These royalties are paid to distributors or record labels when they are the rights holders of an artist’s music.
Publishing royalties are the royalties paid to the publishers (or societies or groups) for the composers of the artists’ music.

If you’d like to learn more about how music royalties work, here’s a full guide to the different types of music royalties and the rights associated with a song.

How does Spotify calculate royalties?

Spotify calculates these royalties to pay its artists, but understanding how can be a bit tricky. On its website, Spotify states it "distributes premium subscription fees and ads to rightsholders.”

“We calculate streamshare by tallying the total number of streams in a given month and determining what proportion of those streams were people listening to music owned or controlled by a particular rightsholder.” — Spotify.

This does include payments for different types of fees, including taxes, credit card processing fees, and billing, along with some other things like sales commissions. However, the true calculation of a rightsholder’s share of the net revenue is determined by streamshare.

How much does Spotify pay artists per stream?

According to the same page, Spotify clarifies that the company does NOT pay artists royalties according to a per-stream or per-play rate. Rather, the company pays royalties to artists based on the “differences in how their music is streamed or the agreements they have with labels or distributors.”

That said, it’s been reported online that artists on Spotify can expect to earn fractions of a cent on every stream. Of course, this is very general, but it might give the best indication of what these “differences” might be.

How much do artists make on Spotify?

Ultimately, while these numbers will vary, artists can expect to earn around $2 to $4 per 1,000 streams. Of course, these numbers are subject to change, but if you’re looking for a rough understanding of how much money artists make from uploading their music to Spotify, that might be your best gauge.

As far as how these payments are made, Spotify reports that they usually send royalty payments once a month, but exactly when and how much artists and songwriters get paid depends on their agreements with their record label or distributor—or collection societies and publishers in the case of songwriters.

8 alternatives to Spotify

Regardless of how you feel about Spotify—either as a musician, content creator looking for music, or just a music fan—it’s important to know that Spotify isn’t the only option. Several alternatives to Spotify are worth checking out. Here are some of Spotify’s top competitors.

1. Amazon Music

While Amazon might be a familiar name to many, did you know that they offer music streaming along with product shipping and film and television streaming services? Amazon Music is similar to Spotify in many ways, though. They offer three tiers of access, podcasts, and a huge music library.

2. Apple Music

Apple Music might be Spotify’s biggest competitor as the company makes it easy for its iPhone customers to try out Apple Music and get used to its offering. Apple Music offers great sound quality and plenty of sync-ability features with its other products, such as iPhones, Apple Watches, and AirPods.

3. SoundCloud

Did you know that SoundCloud has been around since 2007? This free music website is great for new music from up-and-coming artists. It’s not as sophisticated for music streaming as Spotify, Apple Music, or Amazon Music. Still, it’s one of the best places to upload your music and engage with a great community.

4. Bandcamp

Similar to SoundCloud, which is a great resource for new artists looking to host (or sell) their music directly for their fans, Bandcamp is another music hosting service worth exploring.

5. Pandora

One of the oldest names in music on the internet, Pandora is still around and kicking and offers some helpful music options. Though owned by SiriusXM, Pandora might be more popular as a radio service, making it a unique option to explore compared to the services above.

6. Deezer

While Deezer might be a popular music option, it doesn’t have a large footprint in the United States. Still, Deezer is similar to Apple Music and Spotify and could be a nice option for those looking to explore alternatives.

7. Tidal

Another option to consider is that Tidal had a big launch but has seemingly fallen off—in public perception. Still, Tidal does have some great relationships with many artists and features a library with millions of songs and multiple audio quality levels to choose from.

8. YouTube Music

Finally, one of the new options, Google parlayed its Google Play Music service into a YouTube Music app that features music and podcasts. As YouTube continues to take over the content and entertainment world, YouTube Music is quickly becoming a solid alternative to Spotify, Apple Music, or Amazon Music.

Get more music licensing knowledge

If you find these looks into how music streaming and licenses work, feel free to check out more articles on our Soundstripe blog covering these subjects. Here are some recommended reads below: