How Much Does Spotify Pay Per Stream? – Full Guide for Artists 2024

If you’re an artist, it’s important to understand how much you can earn from Spotify. In this guide, we explain how Spotify’s payout system works in 2024, how much you earn per stream, and how to maximize your earnings.

Understanding Spotify Payouts

Spotify pays artists a certain amount of money for each stream of their music. On average, artists earn between $0.003 and $0.005 per stream. However, several factors affect how much you make.

• Revenue Split: Spotify keeps 30% of the revenue, and the remaining 70% goes to rights holders. Rights holders include the artist, the songwriter, the record label, and others involved in the music.
• Who Are the Rights Holders?: Rights holders are the people or companies who own the rights to the music. This includes the artist, the record label, and the publisher.

How Spotify Counts Streams

Spotify counts a stream when a user listens to a track for at least 30 seconds. However, not every stream generates money. To earn royalties, a track must have reached at least 1,000 streams in the last 12 months.

• Minimum Streams: To earn royalties, a track must have 1,000 streams in the past 12 months.
• Stream Updates: Every time a user listens to a song for 30 seconds or more, it counts as a stream.

Spotify’s CEO, Daniel Ek, has clarified that artists can’t make large amounts of money by uploading very short songs.

How Spotify’s ‘Pay Per Stream’ Works

“Pay per stream” is how much you get paid every time someone streams your song. This payment varies based on different factors, such as whether the listener has a Free or Premium account and where they are located.

There are two types of royalties:

1. Mechanical Royalties: These are earned when a song is streamed or downloaded.
2. Performance Royalties: These are earned when a song is played publicly, such as on the radio or via streaming.

The amount you earn per stream depends on how much Spotify is paying at that time.

Average Payout Per Stream

The amount Spotify pays per stream is between $0.003 and $0.005. While this may seem low, the key to making money on Spotify is getting a large number of streams.

• How Many Streams to Earn $16?: To earn $16, you would need 900,000 streams in one month.

Because the pay per stream is low, artists need millions of streams to earn significant money.

Factors Affecting Spotify Royalty Rates

Several factors influence how much Spotify pays per stream. These include the type of subscription the listener has, where they are located, and whether they have a record label deal.

Subscription Type

Spotify has two main subscription plans: Free and Premium.

• Free Users: Streams from Free users generate less money because they listen with ads and do not pay a monthly fee.
• Premium Users: Premium users pay a monthly fee for ad-free streaming, so their streams earn more money for artists.

Premium listeners contribute more to Spotify’s revenue, which leads to higher payouts for artists.

Country of Origin

Spotify pays different amounts based on the listener’s country. The subscription fees vary from country to country, which affects how much artists are paid.

• Example: In the United States, Spotify pays about $0.0039 per stream. In Portugal, it’s around $0.0018 per stream.

This shows that artists in some countries earn more than others.

Label Deals

Artists who have signed with record labels may earn less because labels take a cut of the royalties. Spotify negotiates deals with record labels, and those agreements affect how much the artist gets paid.

• Label Cuts: Record labels typically take a portion of the royalties before paying the artist.

Independent artists, who distribute music without a label, can keep a larger share of their earnings.

Customer Behavior

How users listen to music can also affect royalties. For example, if a song is played repeatedly by the same user, the payment per stream may be lower.

• Repeated Plays: If users listen to a song repeatedly, it may lower the per-stream payout.
• Offline Mode: If a user listens to a song offline, it will not count as a paid stream.

Revenue

Spotify’s total revenue also impacts how much artists earn. When Spotify earns more money, they can afford to pay more to rights holders.

How Artists Get Paid on Spotify

Spotify pays royalties based on agreements with music distributors, record labels, and other rights holders.

Role of Music Distributors

Distributors help get your music onto Spotify. They also take a commission from your royalties, usually around 10-20%.

• Commission: Distributors take a percentage of the royalties they collect for you.
• Spotify’s Payment System: Spotify does not pay artists directly. Instead, they pay distributors or record labels, who then pay the artists.

Record Label Deals

Artists signed to record labels may receive less money because the label takes a cut of the royalties.

• Revenue Split: The label takes a portion of the royalties and then gives the artist their share, based on their contract.

Independent Artists

Independent artists who use distributors like DistroKid or TuneCore keep more of their royalties because they don’t have to share with a label.

• Higher Share for Independent Artists: Independent artists keep most of the earnings after the distributor’s commission.

Calculating Spotify Royalties

Spotify calculates royalties by dividing the artist’s streams by the total streams on the platform. This gives the artist their share of the total revenue.

• Streamshare: Streamshare is the percentage of the total streams that an artist has. This determines how much they will earn.
• Royalty Calculation: Spotify divides the total revenue by the artist’s streamshare to determine the payout.

Spotify also deducts fees for taxes, payment processing, and sales commissions before paying royalties.

Comparing Music Streaming Payouts

Different music streaming platforms pay artists different amounts. Here’s how Spotify compares with others:

• Spotify: Around $0.004 per stream.
• Apple Music: Around $0.006 to $0.01 per stream.
• Tidal: Around $0.01284 per stream.
• Napster: Around $0.01682 per stream.

Although Tidal and Napster pay more per stream, Spotify is still the largest platform with the most listeners.

Spotify vs Apple Music

• Spotify: $0.004 per stream.
• Apple Music: $0.006 to $0.01 per stream.

Apple Music generally pays more, but its user base is smaller, so you may get fewer streams.

Spotify vs Tidal

• Spotify: $0.004 per stream.
• Tidal: $0.01284 per stream.

Tidal pays more, but it has a smaller audience than Spotify.

Spotify vs Other Platforms

• Deezer: $0.0064 per stream.
• Amazon Music: $0.0074 per stream.

Spotify’s pay-per-stream is lower than some other platforms, but it remains the most popular.

Maximizing Earnings on Spotify

To make more money on Spotify, focus on getting more streams. Here are a few strategies to help you earn more:

Getting Featured on Popular Playlists

Spotify has three main types of playlists:

1. User-Generated Playlists: These are playlists created by users.
2. Algorithmic Playlists: These playlists are generated by Spotify’s algorithms (e.g., Release Radar, Discover Weekly).
3. Editorial Playlists: These playlists are curated by Spotify’s editorial team.

Try to get your music on popular algorithmic or editorial playlists. You can submit your music for consideration on editorial playlists through your Spotify for Artists account.

Consistently Releasing New Music

Releasing music regularly helps keep your fans engaged and boosts your streams. By staying active on Spotify, you can build a loyal fanbase and increase your streams.

Building and Growing Your Fanbase

Building a fanbase is key to earning more on Spotify. The more followers you have, the more streams you’ll get.

• More Followers, More Streams: Focus on gaining followers to increase your streams.

Engage with your audience on social media and through Spotify to grow your fanbase.

Frequently Asked Questions

1. How many streams does it take to earn $1,000?
   You would need between 250,000 and 333,000 streams to make $1,000.
2. Do I get paid more if people stream my music on Premium accounts?
   Yes, streams from Premium accounts pay more than streams from Free accounts.
3. Does Spotify pay differently based on country?
   Yes, Spotify pays different amounts depending on the country of the listener.

Additional Resources

• Spotify Royalty Calculator: Use tools like royalty calculators to estimate your earnings based on your stream count.
• Music Business Guides: Learn more about how to grow your fanbase and maximize your earnings.

This guide has explained how Spotify pays per stream, the factors affecting royalties, and how you can increase your earnings. By getting more streams and following these strategies, you can make the most out of your music on Spotify.