How much does Spotify pay for 1 million streams?

Even though there are a few key DSPs, there's no ignoring the impact that getting played on Spotify can mean for your pocket. Also, does Spotify really pay the most? 🤔

Mar 22, 2020

One of the things that most people will agree with is that “streaming” (or the DSPs, whatever you wanna call it), have changed the game.

This chart shows the change in the formats the world used to listen to music from 1995 - 2019 👇

You can see the full version more clearly on the RIAA website

In 1998 - 2001 we saw the emergence of P2P networks like Kazaa and Napster and in 2001 hard drive space had become so cheap you could store crazy amounts of music on your lappy. iTunes came around in 2001 and by 2007 the world started to get crazy about the iPhone.

In 2008, 123m physical albums were sold in the UK, compared with 131m in 2007 and 151m in 2006. At an average price of £7.72, CDs were more than 25% cheaper in 2008 than in 2000

Total revenues for CDs, vinyl, cassettes and digital downloads in the U.S. dropped from a high of $14.6 billion in 1999 to $9 billion in 2008

The pirated product was better

At the time, iTunes still sold DRM 160 kB, but Kazaa could download just as fast in loss-less quality with no protection - the pirated product was better

Because of Kazaa + Napster and co, the consumers had pirated music at their fingertips. Musicians and record labels were struggling

Cue Spotify,

Spotify’s Founder and team built a much better product/experience

We want to make users feel like goal was 200 millisecond between playing and hearing music

Once they got the userbase, they got people to pay the monthly subscription.

Fast forward 2020, Spotify gives a million+ creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it. It’s the largest driver of revenue for the music business today

As Austin Darbo once said on #MMTalks,

Spotify has created a middle-class, there are a lot of secret millionaires running around now

No-one in your Whatsapp group is gonna break down music like this, feel free to share this by clicking the button below:

Getting on a Spotify playlist will have a direct impact on your streams and more streams mean more royalties 💰

How much does Spotify pay for 1 million streams?

So we know getting on Spotify has a big impact, let’s look at the variables:

What are we sure is true?

A stream is counted as 30 seconds and you get 1/100 of a penny

What do we know has been proven?

Spotify pays different depending on if listeners are on free and paid tiers
Also based on where the listener is located (so subscription plan cost)

Summary

🤔To make a decent living, you would need at least a million streams per month.

If someone really feels your music then let’s assume they will listen to your album like ten times per month. If your average album has 15 tracks. That makes some 150 streams per fan.

You would need close to 7,000 die-hard fans who stream your album 10 times per month before you quit your day job…

It’s hard to work out the exact stream/count revenue ratio as it seems to fluctuate daily (exchange rate could also be a factor)

But 0.004 is a threshold for major label artists. .0027 for Indie

1M streams are equal to £4,000 per quarter

Music videos, lyrical video behind the scenes, start selling merch