Spotify has come under recent fire from music legends like Thom Yorke and David Byrne for its royalty rates. The music-streaming giant responded yesterday with the launch of SpotifyArtists.com, a site that answers questions like “How is Spotify contributing to the music business?” and “How does Spotify make money?“
Though there’s plenty of text to wade through, the big news is the released artist rates: Spotify pays out anywhere from $.006 to $.0084 per stream, making for an average of about $.007. In terms of monthly revenues, this means the “niche indie album” will bring in about $3,300/month, compared to the $425,000 projected for a “global hit album.”
Of course, that money doesn’t all go to the band. The 70% Spotify pays to the “artist” doesn’t take into account money that goes to the publisher, record label, and distributor.
Spotify is also introducing “Artist Analytics,” a collaborative effort between the company and Next Big Sound. It’s essentially a traffic tool for musicians and their managers. Artists can chart everything from a song’s popularity to the demographic information of their fans.
Granted, all this information comes from the hand that feeds. But it’s an unprecedented show of candor from a massive player in music-streaming game. Whether Spotify will be able to reach their projected goal of 40 million subscribers before the bottom gives out is another question. Take a look at some of the graphs provided by Spotify below: