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How do you figure out the revenue split if you only know what Spotify pays Artists per stream but not what they actually earn themselves? Lets say I pay $10 per

How do you figure out the revenue split if you only know what Spotify pays Artists per stream but not what they actually earn themselves? Lets say I pay $10 per month and listen to 2000 songs. Then they would earn $0.005 per song on average. If they pay everyone $0.005, their cut would be zero. If they pay $0.003, their cut would be 40%.

cardy31 3y ago
I believe the above post is quoting Spotify, not making a guess.
- sigmoid10 3y ago
  Spotify has not publicly released any numbers of that kind. It seems the post is quoting some other article [1] that not only doesn't answer my question but even admits that the given numbers are mere speculation. So there is zero basis for the statement in the post above. [1] https://dittomusic.com/en/blog/how-much-does-spotify-pay-per-stream/#:~:text=Spotify%20pays%20artists%20between%20%240.003,holders%20and%2030%25%20to%20Spotify https://dittomusic.com/en/blog/how-much-does-spotify-pay-per....
  - lostlogin 3y ago
    The New York Times seems to claim a 70/30 split [1]. However the devil is in the detail as there are plenty of claims from artists of hundreds of thousands of plays resulting in a few dollars being earned. It may be that the split is correct, but that high profile artists are getting a higher rate per stream? Others claim Spotify is great for being discovered [2] and that this is where its value lies for them (as artists). [1] https://www.nytimes.com/2021/03/22/technology/streaming-music-economics.html https://www.nytimes.com/2021/03/22/technology/streaming-musi... [2] https://www.reddit.com/r/spotify/comments/13v4i4k/spotify_pays_me_24k_usdmonth_as_an_artist_and_i/ https://www.reddit.com/r/spotify/comments/13v4i4k/spotify_pa...
hayst4ck 3y ago
I agree with your question, I googled what percent cut Spotify takes, and that was the google provided answer. I think it's right to question my quote. It seemed very much in line with every other market place, so I didn't question it too much. In an effort to be more accurate, this is the official financial report from Spotify to shareholders: https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3/787b611a-8789-4a1a-86de-055ba2ade19a.pdf https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3... It claims $3,357 million in revenue, and it claims that revenue cost them $2,472 million. Which implies they are taking at least a 26% cut. I am a financial layman, so perhaps someone with more expertise could correct me if my understanding is wrong.
- sigmoid10 3y ago
  >Which implies they are taking at least a 26% cut No, that implies they get at most a 26% cut. But cost of revenue includes everything needed to deliver the service. That includes infrastructure, maintenance, all the people working on that stuff, bandwidth, etc. So the actual cut must be much lower.
  - deleted 3y ago
    [deleted]
  - hayst4ck 3y ago
    Money from subscriptions can go to Spotify or artists. If money is going to Spotify for profit or services, that is their cut. That is the amount of money taken from artists to provide the service of Spotify. Any money in cost of revenue not going to artists for the purposes of running infra/maintenance, etc. is part of Spotify's cut. Therefore 26% is a lower bound and spotify may be taking more than 26% of the total money earned by subscriptions. We can assume that all gross profit did not go to artists, which means gross profit is the lower bound of Spotify's cut. I think you are asking what percent of profit do artists get, while I am asking what percent of income do artists get. I think when comparing this to the Apple App store. Apple is taking a 30% cut of income, not a 30% cut of profits, so asking what cut of income spotify is taking is appropriate.

cardy31 3y ago

I believe the above post is quoting Spotify, not making a guess.

sigmoid10 3y ago
Spotify has not publicly released any numbers of that kind. It seems the post is quoting some other article [1] that not only doesn't answer my question but even admits that the given numbers are mere speculation. So there is zero basis for the statement in the post above. [1] https://dittomusic.com/en/blog/how-much-does-spotify-pay-per-stream/#:~:text=Spotify%20pays%20artists%20between%20%240.003,holders%20and%2030%25%20to%20Spotify https://dittomusic.com/en/blog/how-much-does-spotify-pay-per....
- lostlogin 3y ago
  The New York Times seems to claim a 70/30 split [1]. However the devil is in the detail as there are plenty of claims from artists of hundreds of thousands of plays resulting in a few dollars being earned. It may be that the split is correct, but that high profile artists are getting a higher rate per stream? Others claim Spotify is great for being discovered [2] and that this is where its value lies for them (as artists). [1] https://www.nytimes.com/2021/03/22/technology/streaming-music-economics.html https://www.nytimes.com/2021/03/22/technology/streaming-musi... [2] https://www.reddit.com/r/spotify/comments/13v4i4k/spotify_pays_me_24k_usdmonth_as_an_artist_and_i/ https://www.reddit.com/r/spotify/comments/13v4i4k/spotify_pa...

hayst4ck 3y ago

I agree with your question, I googled what percent cut Spotify takes, and that was the google provided answer. I think it's right to question my quote. It seemed very much in line with every other market place, so I didn't question it too much. In an effort to be more accurate, this is the official financial report from Spotify to shareholders: https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3/787b611a-8789-4a1a-86de-055ba2ade19a.pdf https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3... It claims $3,357 million in revenue, and it claims that revenue cost them $2,472 million. Which implies they are taking at least a 26% cut. I am a financial layman, so perhaps someone with more expertise could correct me if my understanding is wrong.

sigmoid10 3y ago
>Which implies they are taking at least a 26% cut No, that implies they get at most a 26% cut. But cost of revenue includes everything needed to deliver the service. That includes infrastructure, maintenance, all the people working on that stuff, bandwidth, etc. So the actual cut must be much lower.
- deleted 3y ago
  [deleted]
- hayst4ck 3y ago
  Money from subscriptions can go to Spotify or artists. If money is going to Spotify for profit or services, that is their cut. That is the amount of money taken from artists to provide the service of Spotify. Any money in cost of revenue not going to artists for the purposes of running infra/maintenance, etc. is part of Spotify's cut. Therefore 26% is a lower bound and spotify may be taking more than 26% of the total money earned by subscriptions. We can assume that all gross profit did not go to artists, which means gross profit is the lower bound of Spotify's cut. I think you are asking what percent of profit do artists get, while I am asking what percent of income do artists get. I think when comparing this to the Apple App store. Apple is taking a 30% cut of income, not a 30% cut of profits, so asking what cut of income spotify is taking is appropriate.