How Much Does Spotify Pay Per Stream? Answered!

Let’s agree that as much as we mock Spotify’s ads, the platform is one of the biggest music streaming services. It is one of the best ways for emerging artists to make their music heard across the globe while monetizing them at the same time. However, a question that many artists have asked is, “How much does Spotify pay per stream?” and the answer isn’t as simple. So in this article, we will try to answer this question and help you understand the revenue sharing system of Spotify.

How Much Spotify Pays Per Stream?

Okay, let’s address the important question first, how much does Spotify Pay Per Stream? Well, there is no simple answer for this but pay-per-stream rate, or PPS in short differs from country to country.

According to an analysis by iGroom (Music Distributor) from 2022, the PPS in the United States is about $0.003 to $0.004 while an artist in India will earn a fraction of that which is $0.0008. So an artist in the US can earn about $3 per 1000 streams while an artist in India will make $0.8.

The rate might have increased in recent years so we recommend you use this revenue calculator by SoundCampaign. You can use it to check how much revenue you can earn per stream from Spotify in your country.

How Spotify Calculates Pay-Per-Stream

You might be wondering why a difference in PPS between the two countries and to answer it, we have to discuss how Spotify calculates pay-per-stream. Spotify uses a method called Streamshare where the total royalty pool created by streaming is divided by the number of streams of the artist on Spotify.

It is also referred to as the Pro-rata system. The royalty pool differs from region to region as it is influenced by various factors. Let us have a look at them.

1. Subscription vs. Ad-Supported Users: Spotify offers a subscription-based Premium model and a free ad-supported model. Artists will generally earn more from Premium listeners, compared to the free ones.
2. Regional Pricing Models: The service adjusts the royalty pool of a region depending on how much it charges for its Spotify Premium subscription in the country and how much it makes from it. For example, the monthly Premium plan in the US starts at $11.99 while the same plan goes for nearly $1.45 in India.
3. Type of Content: The duration of the stream also plays a role in the total payout. The longer the track like a podcast, the higher the revenue earned. It’s not like shorter payouts don’t make much but longer tracks do earn more.
4. Listener Engagement: As of late 2023, Spotify has made it clear that 30 seconds of playback will count towards one stream and total streams will determined based on the number of unique user interactions.

Country-Based Analysis of Spotify Payouts

Now you should be able to understand why there is a difference in the pay-per-stream amount between the two regions. Spotify generates more revenue in countries like the United States, due to the higher cost of the subscription plan which is 10 times more than the cost of the same plan in India.

But this metric is ever-changing, as more people jump on the platform and buy the Premium plan, the PPS also gets increased. To give a better perspective of the PPS around the globe, we have created a table of 20 countries with varying payouts per Million streams. The data for this table comes from iGroove based on their 2022 analysis of the platform. All figures have been converted to USD for easier comparison.

As you can see in the table, English-speaking regions offer the best payouts, with upwards of $3000 per million streams. South Korea also isn’t behind which can be due to the increasing popularity of K-pop. However, the PPS falls below $1000 in most Asian markets as you can see. Even though India has a bigger population and higher market adoption rate, the regional payout is only $841.80 for a million streams.

So as an artist, you should try to target English-speaking audiences with your songs. This will help the song reach a global appeal and help you earn the most from Spotify.

How Spotify Distributes Revenue With Artists

Calculating the pay-per-stream is one part of the equation. If you want to learn how much you can make on Spotify then you also have to know how Spotify distributes revenue with artists. Streaming services like Spotify or Apple Music don’t just pay the artist directly. An artist has to partner with a distributor or a record label that will upload their songs or albums on the platform on their behalf.

Spotify then pays out 70% of the revenue to artists and rights holders while keeping a 30% cut. So let’s say your song made $1000 on Spotify, it will take a $300 cut and pay the remaining $700 to the right holders.

The right holders include the label, distributor, songwriter, and recording artist. As an artist, how much of that 70% you will receive will depend upon your contract. While labels can take up to 80% of the earned revenue, distributers take only 20% leaving the rest for artists.

Real-Life Case Studies of Artist Payouts by Spotify

To better understand the payout structure of Spotify, let us have a look at some real-life case studies of artists and how much they have earned from the music streaming platform alone.

These case studies show that the pay-per-stream is not the same for each of the artists. It differs from person to person and depends on various factors. If you look closely, Beautiful Beats, received a lower payout which could be due to the contract between him and the right holders, and other artists he collaborated with. As always, the country in which your music is most streamed is important, as indicated by all of the artists in the sources.

Drawbacks of Spotify’s Streamshare Model

As much as Spotify would like to brag about how excellent its Streamshare model is, the reality is that many aspiring musicians struggle to make a living off the platform. And after taking a closer look, we have come up with some common drawbacks of Streamshare.

1. Low Per-Stream Payouts: The most common criticism is the low per-stream payouts for artists. The amount can be fractions making it difficult for many artists, especially for young talents.
2. Inequality Among Artists: The StreamShare model usually benefits popular mainstream artists with millions of streams compared to lesser-known artists. This creates an unequal pay gap within the music industry.
3. Opaque Payment Structure: Spotify’s payment pro-rata system is complex, to say the least, and lacks transparency. This leads to confusion among the artists who prefer a system where they can understand how their earnings are calculated.
4. Global Disparity in Payouts: Payouts can vary widely based on the country of the listener. This leads to many artists receiving lower payouts. This influences artists to target their music towards regions with higher pay-per-stream rates.
5. Lack of User-Centric Payment: There is no option for users to directly support the artists they listen to. Something like channel memberships on YouTube. Some artists argue that this could be a much fairer alternative.
6. Major Label Dependency: Artists must sign up with labels and distributors to get their songs on the platform. This leads them to receive a smaller cut of the overall revenue. It proves to be a disadvantage for independent artists who solely rely on streaming revenue.

With more than 11 Million artists on the platform, it’s not easy to make a living from Spotify. This is why, in my opinion, musicians should promote their work on platforms like Instagram, TikTok, YouTube, and Facebook. They should also use other streaming services like Apple Music which pays more per stream compared to Spotify. Building a brand is crucial for earning more on these platforms.

What are your opinions on the topic? Please let us know in the comments below.