When I choose to amplify my dislike of Spotify on social media, I always get pushback from Spotify fanbois who dispute my statements. One such statement is the fact that Spotify claims to pay creators 70% of revenues, which is an absolute falsehood. Spotify pays out out of revenues approximately 62% of gross revenues. Then the fanbois state that the music business pays out 70% of revenues. This 70% includes various minimum payments to big labels and, from what I understand, payments to the big 3 includes payments to those labels for allowing Spotify to carry those labels artists.
For anybody not privileged to sign to a major label, things aren’t so great. Based on the information gleaned from Spotify’s website and app, the average artist is getting the shaft. Advertising rates they publish state that the contracted advertising rate for artists looking to promote on Spotify is $1.50 to $3.50 per thousand impressions. For consumers on Spotify’s “ free” plan, they must plan to have anywhere from 3 to 5 ads played per song listened to. I’ve come up with this observation from statistics for ad insertions over a 3 year period. Using average numbers, this means Spotify makes from “free” subscribers about $.012 per song.
As of the latest numbers from DistroKid, my distributor, Spotify is paying $.0032 per song play. I don’t what math you’ve taken, but .0032/.012 is not 70%, but 26 2/3%. I have no idea whether paid subscribers, which according the 20-F form Spotify is required to file with SEC, amount to 236 million individuals have an equal participation rate, but the numbers just don’t add up. By the way, the same 20-F says Spotify has a total of 600 million subscribers, so the vast majority of subscribers are “free” ones.
