Hot on the heels of all the recent gnashing of teeth about streaming music services and that NPR intern brazenly admitting that she has paid for almost none of the music in her library (the nerve!) comes a bit of news from UK-based artist distributer Ditto Muisc: Spotify Premium, the streaming app's third and most expensive service tier, pays musicians and labels three times more per stream than its free service. In other words, if you're paying that (completely reasonable) $9.99 per month for Spotify Premium, you're giving your favorite musicians a much better deal.
Digital Music News points out that, for example, Adele's 21 took a whopping 18 months to land on Spotify, even though Adele was willing to license the album immediately to paying, premium subscribers. Makes sense, right? The problem is that Spotify doesn't separate its content based on subscriber level and refused to match up that content to only some of its subscribers (how many thousands of free listeners would miss out on 21, and how many ad dollars would disappear?). Spotify pays out far less to musicians for free streams, and even though it gets direct revenue from that monthly subscription fee, it seems that Spotify has a greater incentive to keep people listening to ads on its free service – and, it looks like, to keep paying artists a lot less per stream.
The takeaway? Paying for premium means that each stream pays out about one and a half cents to the artist/label. If you're streaming for free, Spotify pays out half of one cent per stream. If you're feeling mathematical, count how many times you stream an artist in Spotify in a given day, and you'll have a good sense of how much money your favorite band is making from your activity on Spotify. Will this info lead more people to sign up for premium? It's hard to say, but as a happily paying Spotify user, it does make me feel a little warm and fuzzy that artists get a better deal when I hit play.
Check out the chart below, which makes it all pretty clear.