Oct 30, 2020 Estimates vary on how much a Spotify stream is worth to artist: from $0.006-0.0084 to as low as $0.00318/stream Spotify went public in April 2018, with a valuation of $26.5 billion by the end of the first day’s trading Spotify market cap in early May 2020 was $26.9 billion Highest market cap to date is $35 billion during Q3 2018. (For example, my wife uses less than 1 gigabyte of data per month, while I often use more than 2 gigabytes. The difference is almost entirely my Spotify and now Apple Music usage.) Depending on your plan and how much you currently use, starting to stream music on any service could easily add $15 to $30 a month to your bill if you aren’t careful. Adding them elsewhere is a little different. Rearranging your home screen is a little different in iOS 14. First, go to the screen where you want to place the widget (you can also drag it around.
Exactly how much streaming services pay out to musicians in royalties has always been a hot topic. In truth, there's no simple answer, but we'll try to explain how much your music could be earning in streaming royalties from platforms like Spotify, Apple Music and more as well as the different factors that affect royalty payments.
How much do music streaming services pay musicians?
Music streaming services like Spotify, Apple Music, Deezer, Tidal and Amazon don’t have a fixed “pay-per-stream” rate when it comes to paying out music royalties to artists.
There are lots of factors that affect how much money one stream is worth in royalties. The main factors include:
- The listener's country and location
- Whether the listener has a paid subscription or free account
- The specific artist’s royalty rate
- The relative pricing & currency in different regions
This makes things complicated when trying to predict what you'll earn in streaming royalties. It's just about impossible to accurately calculate exactly how much you’ll make from a certain number of streams, as all these factors need to be into account.
However…
A recent study based on information collected from real musicians and third-party websites provides a general look at the estimated royalties currently being paid out to artists in the USA by the world’s biggest music streaming platforms.
Using this data, we’ve created a Music Streaming Royalties Calculator.
Just choose a music platform, enter your predicted streams and check out the estimated royalties total in US dollars.
IMPORTANT: THE ESTIMATED ROYALTIES PREDICTED BY THIS CALCULATOR WILL NOT BE 100% ACCURATE. MANY FACTORS AFFECT STREAMING ROYALTIES AND THIS SHOULD ONLY BE USED AS A GUIDE.
Of course, the royalty figure you get here won’t be an exact match to your real-life royalty statements due to the unpredictable nature of streaming payouts. But it does offer a nice ball-park figure to help you understand how much your streams are generally worth.
As you can see, some music services pay out more than others. But keep in mind that some platforms with lower royalty rates may have more users and a wider reach. So a stream from certain platforms might actually be worth more in terms of reach, exposure and building your profile.
If you’re interested, here are the estimated “per-stream” figures our calculator is based on.
Napster
$0.019 per stream
Tidal
$0.01284 per stream
Apple Music
$0.00783 per stream
Google Play Music
$0.00676 per stream
Deezer
$0.0064 per stream
Spotify
$0.00437 per stream
Amazon
$0.00402 per stream
Pandora
$0.00133 per stream
YouTube
$0.0.00069 per view
While these numbers might give a vague idea of music streaming royalties in the United States, it’s important not to think about streaming services solely as money-making platforms.
As you can see from our calculator, it takes a lot of streams to start earning the big bucks - not that it's not possible! There are loads of independent artists out there doing huge streaming numbers and making a good living solely through streaming royalties.
However, when you release music on Spotify, Apple Music and other streaming platforms, they offer a direct route to new and current fans. Exposure like this is a stepping stone to success.
Do you have any questions about music streaming royalties? How closely does our estimated music streaming royalty calculator reflect what you earn from streaming services?
We’d love to know! Let us know in the comments and below and share this with your fellow musicians.
While travelling in public transport we often hum to songs of our choice thanks to the online streaming music services. Spotify is one of the most popular subscription-based music streaming services today. It was meted with high reception given its business model where users could subscribe or even download the app and listen to free music by agreeing to allow streaming ads.
With this simple tweak, Spotify found more takers than Apple’s iTunes, as the latter would only allow subscribers to listen to music. Plus, Spotify capitalized on its huge catalog of music and a very intuitive and user-friendly user interface.
Inception
The idea of a subscription-based music service struck Daniel Ek (former CTO of Stardoll) and Martin Lorentzon (co-founder of TradeDoubler) in 2006 the two got together to launch Spotify. In an anecdote, Ek said that there was some confusion about the name, but later the two decided that “spot” and “identify” could be combined to name it Spotify. The Spotify application was officially launched on 7 October 2008.
When they first launched, they offered users over 50 million songs, with convenient features including offline streaming and saving songs in playlists. The only other competitor that had something similar was Apple at that time. So, Spotify hit it off with their listen to free songs by allowing streaming of sponsored ads, and a very competitive subscription pricing.
Evolution
Spotify services were introduced in the US in July 2011. As a launch offer, it supported a six-month free ad-supported trial period, where users could listen to unlimited music. The offer was up for grabs for a year, and by the beginning of 2012, the free trial got modified, and users were limited to 10 hours worth of free streaming and just five-song replays per month. But Spotify started losing out on customers, and by 2012 March, they once again reverted to unlimited music like before.
In the UK, on the other hand, Spotify opened public registration for the free service tier. But this step got an overwhelming response, and Spotify retracted this and sought to its invitation-only policy. To give their free users a sneak peek into what the subscription could offer, there were premium cards that were handed out to users during 2019 Christmas, allowing them to experience the premium features of Spotify for one, three, six, or even twelve months.
How Much Is Spotify App Worth Per
A decade later, Spotify was acquired by Microsoft for approximately $41.8 billion. On 31 January 2018, Spotify began testing its new Pandora-styled standalone app called Stations for Australian Android users. There are 62 dedicated music channels for respective genres. Some of the channels are “Release Radar,” “Daily Mixes,” and “Discover Weekly.” They also offer select editorial playlists, such as “RapCaviar,” “¡Viva Latino!”, “Ultimate Indie” and “Alternative R&B.”
What sets Spotify apart is the categorization into genres, saving users the pain of looking up genre or tuning into something they like without first setting up a library. It also brought in a bit of artificial intelligence where the moment the user loves a particular item on the playlist, a custom radio channel is created. If there are at least 15 such items, the My Favorites channel is unlocked. For unpaid users of the platform, the experience is slightly inhibited by sponsored ads being streamed. They also introduced the data saver feature to ensure to conserve mobile data while still enjoying music on the go. As of today, Spotify is available in 79 countries, with offices in 44 regions across the world.
Awards and Achievements
Spotify has won many recognitions since its launch, including the Technology Pioneer for 2011 by World Economic Forum (WEF). In 2017 it was the most downloaded music app on the iOS platform beating Apple’s iTunes by a huge number in the United States.
Net Worth of Spotify in 2020
Spotify’s success rests on its freemium business model, which allows it to increase its reach and also generate revenue through subscriptions. It offers unlimited subscription packages to its users, even when its competitors have mostly restrained such offers. Immediately after its launch, the service did not make any financial gains; on the contrary, they reported a loss of $4.4 million.
But by 2010, it was picking up the pace, and more people were subscribing to the platform. The company predicted revenues of $500 million in 2012 but raised only $244 million. Also, they had estimated the loss figures to be $40 million, but that too exceeded by another $20 million. The company received a Goldman Sachs-led funding raising around $100 million in 2012.
Spotify next approached the Wall Street Journal for $400 million in funds. The deal was closed in June 2015, with Spotify raising $526 million. In early 2016 Spotify raised $500 million through convertible bonds. To boost income in May 2016, Spotify introduced “Sponsored Playlists” that allowed music brands to choose their target audience.
How Much Is Spotify App Worth Animal Jam
In September, Spotify clarified that it had to shell out over $5 billion to the music industry. As part of renegotiated licenses contract with Universal Music Group and Merlin Network, Spotify announced that over the next two years, it would pay $2 billion to the network.
Though the company is not profitable yet, its net worth has been set at $24 billion as of November 2020. Its founders are positive that the business will turnaround gave the increasing number of users, which is at 159 million as of now, with 71 one of them being paid customers.
More recently, Spotify introduced a playlist for pets. Even though the company has not seen profits for some time now, its uptake has been remarkable. In February, it was reported that Spotify hit 124 million premium subscribers, which was up by 29%. Spotify has been a great launching pad for new age music artists, who can use this platform to reach out to potential listeners. For a very long time, it did not seem to have any direct competitor, but with the advent of TikTok and its rising popularity, Spotify will have to up its strategies to continue retaining its customers.