Streaming platforms - Focus on Spotify

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From Taylor Swift to Neil Young, there is no shortage of musicians lining up to complain about Spotify. Among other criticisms is that of not paying artists fairly – especially those who are less well known. The fact remains that Spotify dominates the music streaming market, making it hard for anyone in the music industry to ignore the platform. To help you make up your mind, here is our review of its bio, its features, and its payment model.

How was Spotify born?

The company was founded in 2006 by two Swedes who had previously worked in online marketing and sales – Daniel Ek and Martin Lorentzon. The music streaming platform first opened in the UK in 2009, with a £9.99 monthly subscription in which subscribers could search for tracks and create playlists for unlimited listening, as well as a free version in which ads interrupt the flow of music and the user was limited to 10 hours per month.  

Since then, its dual pay/free model has remained the same and Spotify (spot + identify) has over 165 million subscribers in 184 countries, giving it the top spot on the music-streaming podium.  

To understand the platform's almost immediate success with subscribers, we need to remember its original context in a time when music fans looking for specific artists had two choices: download songs illegally – and therefore for free – via tools like Napster, or download legally from stores like iTunes at 99 cents a track or around 10 euros an album. Spotify offered a service that reconciled the advantages of these two choices – accessibility and legality – the possibility of consuming the music of your favorite artists without stealing them.

Spotify multiplies subscriptions thanks to its affordable and customizable offer. On the menu of the €9.99 per month plan in 2022: a catalog of more than 70 million tracks, customized playlists designed by algorithms that analyze the subscriber's listening habits, and annual Tops designed to be shared on social networks.

Spotify is a Swedish streaming platform created in 2006 that now has over 165 million subscribers – the largest in the market. It offers its members a monthly subscription fee or a free version where listening is interrupted by ads.

How does Spotify work?

To build its listening catalog, Spotify signs partnerships with digital distributors and labels. As an artist, you can't create or edit your profile or upload your music directly; you have to go through one of these intermediaries.  

Once you have signed up with one of these, you can access their Spotify for Artists services. Your page is usually managed by your manager or label, but if you go through a distributor and you are not signed, you have control over your Spotify page via the account created with your distributor, for example DistroKid, TuneCore or CD Baby.

Spotify for Artists features include: tracking your listening statistics by day/month/year with useful info about your audience that can help you target them (where they are, their average age, their favorite music genres), customizing your profile with your visuals and bio, creating playlists that you can share with your fans on your page, animating your tracks with your videos via their Canvas tool, or with your lyrics.  

After you've spiced up your profile, you'll probably ask yourself the question: how do you integrate playlists? That's the subject of a future article, but in the meantime, we can give you a hint: a week before your release date, an alert will appear in your Spotify for Artists account inviting you to pitch your song to a playlist curator, so don't hesitate to click on it and fill out the form carefully.

As an artist, you'll need to go through a digital distributor – or your label if you're signed – to create your profile and access Spotify for Artists. You'll be able to track your listening statistics with audience info, customize your profile with your visuals and bio, create playlists and contact their editorial teams.

How much do I earn on Spotify?

It's hard to answer in absolute terms when looking at how many cents an artist makes when their track is streamed on Spotify. However, the blog The Trichordist has done the calculation using their data from 2019-20 and found that a listen earns an average of $0.00348 or 0.0030 euro cents.  

What we know from international studies conducted by Alpha Data America in the US and Aepo Artists in Europe in 2019 is that very, very, very few artists live from their streaming revenues (we're talking about all platforms here, not just Spotify): 90% of artists earn less than 1,000 euros a year – and this is even when their tracks have been played up to 10,000 times; and only 1% earn a minimum wage through streams.

These inequalities can be explained by Spotify's business model, which is based on the pre-digital music industry, as we have explained in this article.

There is no infallible method to calculate the average remuneration of an artist per track streamed on Spotify, but studies from 2019-20 estimate it to be $0.00348. What is certain is that artists do not earn their living via streaming, but rather via other sources of income such as online sync and live performances.

What do I need to remember?

Spotify is the biggest streaming platform in terms of subscribers. To access its artist services, you must go through a digital distributor if you are self-produced and through your manager/label if you have one. It is estimated that an artist earns 0.0030 cents for each time their track is streamed on Spotify.

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