Why Spotify Pays So Little
Like others in this thread, I naively assumed this was how Spotify already worked, and wondered why the payouts tended to be so low. Now it makes sense, and puts the numbers here (<a href="http://www.spotifyartists.com/spotify-explained/" rel="nofollow">http://www.spotifyartists.com/spotify-explained/</a>) in context.<p>Realistically, it would be both hard to change structurally and a hard sell for major labels to give up what is effectively <i>a subsidy of popular music by indie fans.</i> Let’s take the author’s thought experiment to its logical extreme:<p>Imagine “Terry” listened to just one obscure band for the entire month of February. $7 of his $10 subscription fee is going to artists, but let’s say he’s also the only fan of that band on Spotify. So that band has effectively zero percent of Spotify’s plays for the month, meaning that the band gets effectively zero percent of Spotify’s monthly revenue.<p>Terry thinks $7 went to his favorite band, but it actually got divided up among February’s top 40, with only a fraction of a fraction of a cent going to the band!