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Let's Talk Spotify Royalties

Spotify ranks amongst the most popular music streaming platforms that metal & hard rock bands use to get their music in front of new audiences and fans. It also gives content creators access to royalty free music that they can use on other sites. Spotify has proven to be effective in making artists famous and astronomically increasing their earnings. Most successful artists have multiple sources of income, of which royalty from Spotify is a part.

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Royalties are fees paid to writers, artists, rights holders when their song is downloaded, performed, or streamed. In a simpler explanation, royalties are money paid to song owners when users stream their music. Simple!

Let’s help you make more sense of the process by answering these three important questions:

  • How does Spotify split streaming royalties?
  • How much will I learn from Spotify streams?
  • How can I increase my income on Spotify?

Let’s dig deep into the mystery that enshrouds Spotify’s illusive royalties’ payout method.

How Spotify split music royalties

As opposed to the popular opinion that Spotify pays a fixed amount on every stream, it actually doesn’t. In fact, a good majority of music streaming companies don’t pay content owners per-stream rate. Rather, they use “stream share”

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Spotify gets it revenue via advertising and subscription fee. It then calculates the “stream share” of each artist. An artist’s stream share will determine what percentage of that revenue he/she will receive. Spotify calculates this stream share by totaling the Spotify streams that occur in a month, in a county and finds out the percentage of those streams are individuals listening to your music. You are then paid based on that percentage after Spotify takes its share of the profit to ensure that the business keeps thriving.

The money paid to artists is divided in two ways:

  • Recording royalties: Spotify   pays this money through the artist’s record label or through an aggregator
  • Royalties for music publishers

How much can you expect to earn

Unfortunately, Spotify has not released enough data on earnings to enable us to predict what you might possibly earn from your streams. The majority of data online are simply figures that some artists disclosed based on their earnings, while others are fictitious numbers that are written by bloggers to drive traffic to their site.

However, Statistica carried out thorough research based on figures from 2019 that an artist needs 336 842 streams on Spotify to earn the U.S. minimum wage on the platform—this figure only applies to streams that originate from the United States.

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How can I increase my income on Spotify?

The only way to increase your income on Spotify is to increase the number of streams you get. This will in turn increase the Royalties you get from the platform. Your aim should always share your music with others and get more people to stream your song on the platform. Here are some effective ways to increase your Spotify streams:

  • Share across your social media platforms

Build a vibrant social media followership and constantly share a Spotify link to your new releases there. Experiencing a lull in your content creation process? Re-share nostalgic tracks from when you just started and the link to your most famous anthems.

  • Submit releases prior to their release date

It’s best to submit your release way before your planned release date. Spotify recommends that you submit your track at least 7 days before your official release date. Doing this gives streaming services the room to consider your track for some special offers that can boost your streams.

  • Paid Promotions

You must have heard the phrase “It costs money to make money,” that phrase holds true with making money from Spotify. Pay influencers, use social media ads, search engine optimization and other marketing mean to invite people to stream your music on your Spotify platform. An example of paid promotion is by allowing Spotify to reduce lower your royalty rates for more exposure—this works best for new artists.

In Summary

Royalty in Spotify is enshrined in a lot of mystery, as such, people are confused about how Spotify calculates royalties paid to the artist, how much they can earn from the platform and how to increase their earnings. These questions have been answered in this article.

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