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Spotify Pay Per Stream: How Does It Work?

music streaming: tips and tricks Nov 04, 2022

If you are an emerging musician and you are constantly releasing your tracks on Spotify, you should definitely be aware of Spotify pay-per-stream. Streaming is one of the primary music income sources for many artists like yourself in 2022. With the business currently gone completely computerized, delivering your music online to large DSPs like Spotify, is presently an essential step for getting it into the ears of your followers, fans, and other music lovers. 



Music streaming usually generates two kinds of royalties, one is mechanical royalties and the second is performance royalties. Speaking of performance royalties, read our blog article on Music Royalties 101: How Performance Royalties Work. 


Spotify streams work differently because it is on pay per stream basis. That is, the pay is for each stream a person makes who is listening to your track. Youtube Royalties, on the other hand, work through YouTube Content ID and Copyright. To know more, read our blog article: YouTube Monetization 101: Income Generation. 


What’s The Amount?


A ‘pay per stream’ is how much cash or pace of pay, is produced each time somebody streams a track on any streaming platform, be it Spotify, Wynk, Gaana, or Apple Music. Spotify pays music artists between $0.003 - $0.005 per stream on average. That works out as an approx income split of 70/30 - so that is 70% to the artists and 30% to Spotify. Note here, that artist doesn’t limit to the singer, but any person who publishes the song under a verified account. It may not necessarily be the singer, it can also be the songwriter, music composer, or any record label they have a contract with. 


Are you thinking to yourself that it is too less? Let us give you an idea of the competition. Apple Music pays 52% to all record labels and a similar rate for distributors in every country. Like most streaming apps, Apple Music decides eminences on a stream share model. Now, if Apple Music pays 52% to the record labels that you have a contract with, you need to look into the shares between yourself and the label itself. 


Royalty Calculator


You can gauge your approximate amount of Spotify royalties, by using Spotify’s royalty calculator. It is pretty simple actually. Try to get the figure of the total streams you have for your desired track and multiply that by 0.004. The total is your revenue so far. For example, if you have 100 streams as of now, you would be paid around 0.4 dollars. Again, this is only a rough figure. The official records are only available with Spotify and are confidential, thus won’t be revealed to you.



How Does It Work?


Spotify works on a platform-centric distribution model. This implies the income created and paid out to individual musicians like yourself, delivering on the stage is evenly divided in light of the accompanying 4 variables: Spotify's complete streaming income pool, the arranged worldwide payout as a level of that income, all-out number of streams on the stream, and finally the number of your streams on the stage. There's no such thing as an across-the-board income pool. All things being equal, there are heaps of independent pails - for each sort of membership, every other local market, country, etc. What's more, various sorts of streams must mean something basic - not all streams can truly be considered equal to one another. 



For each music artist delivering music, the compensation per stream rate will always be dynamic  — just on the grounds that there are many variables influencing the general income. 


Your Distributors


One of the major factors that affect your Spotify royalties is your choice of music distributor. Note that the contract of payment is not actually between you, the artist, and Spotify, unless you are distributing your music yourself. As aforementioned, the deal between you and your record label eventually decides the contract of royalties you will be receiving as an artist. More often than not, your record label or distributor usually takes most part of your revenue, so make sure your deal with them constitutes your take appropriately. 



Where Your Listener Is Coming From


Your royalties also depend on the place from which your listener is streaming your track. So for instance, audience members in the US will pay $0.0039 per stream, while audience members in Portugal will just compensation of $0.0018. If you develop a worldwide base of audience members from across the world, odds are this will vigorously impact your compensation per stream rate.


Premium Account or Free Account


If your listener has a premium account, there are chances that the payout coming from that stream is a little higher than a listener who is streaming your track from a free account on Spotify. Spotify Premium audience members bring more to the table when they tune in, contrasted with Free audience members. This likewise implies, Spotify offers better eminences when Premium clients stream your music.


These are some factors and other basics you should know about Spotify pay-per-stream. However, you can invariably increase your revenue of the same by getting your track playlisted by Spotify editorial team. Speaking of playlisting, read our blog article on Pitching Your Music To Curators. 



We at GreaseRelease, have a bunch of curators on our network who are looking for new & exciting music to push on their massive playlists. If you make music and want to reach a wider audience, check out our submission platform and get a chance to reach millions of listeners! Submit your tracks now!


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