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They paid around $500 million in 2013. With 24 million users, that's $20.883 per user per year. To check this: According to Spotify, their 24 million users lis

They paid around $500 million in 2013. With 24 million users, that's $20.883 per user per year. To check this: According to Spotify, their 24 million users listened to 4.5 billion hours of music in 2013. This gives us 166.667 hours per user per year. If you take an average song length of 3.5 minutes, this results in 2857 plays per year, which, if you assume Spotify's number of $0.006 to $0.0084 (let's take 0.0072 USD) per stream, this results in 20.57 USD per user per year. Wow, very close, it indeed looks like a user generates around $20 per year. If the entire US population would use Spotify, this results in roughly $6.5 billion per year. Of course, that's a bit rubbish, let's use the amount of households in the US. Around 120 million. So that's more like $2.5 billion. If we assume an average household income of $45'000, this would support around 55'000 individual household incomes in the music industry (artists, studios, engineers, right holders and so on). Of course, since most money flows to the mega stars. It would support much fewer people. So let's take 31'400 people. Why? Because it goes well with the US population figure of 314 million. It's exactly 0.0001% of the US population. Still thinking about making a living with music?

pathy 13y ago
Music streaming (be it Spotify or otherwise) is not the only source of revenue for musicians though. Touring, Merch and so forth also generate revenue. That said, most musicians obviously cannot live off their music.
brianmcc 13y ago
0.01%, not 0.0001% surely? I.e. 1 in every 10,000.
Bsharp 13y ago
I'm going to assume the revenue numbers you mentioned are US numbers. The entire population isn't trying to be musicians - you're only competing with other musicians for that money. This website[1] offers various estimates for the number of active musicians, but the numbers are quite scattered due to the subjective and numerous definitions of "musician" (orchestra player doesn't need royalties, rock band member does, music teacher doesn't, etc.). I'm going to use the number of albums produced to determine the number of active musical acts who would get paid by Spotify, which according to the source was 76,875 in 2011, and one album per active musical act seems reasonable. Assuming that is a US number for conservatism (not a global number) then we get 76,875 active musical acts competing for your $2.5B. Since most musicians won't assume that they will become superstars, using the 80/20 rule we'll chop off the top 20% of active musical acts and the top 80% of the revenue (which imo is probably most artists that anyone knows) to get 61,500 musical acts competing for $500M. Now lets assume 3 musicians collecting royalties per musical act (seems reasonable, lots of 4-5 member bands, lots of solo artists, conservative) for a total of 184,500 musicians competing for that $500M. $500M supports 11,111 people under your $45,000/year income assumption, meaning 6% of the bottom 80% of active musicians would get a livable income from Spotify alone. As other posters have pointed out, musicians have many other sources of income such as other streaming services, touring, record sales, merch, etc. So yes, since you have a 6% chance of earning a livable income from a singular source of music streaming while being in the bottom 80% of active musicians royalty-wise, I'd say it's definitely worth it to keep doing what you love. This also ignores the many non-royalty-based careers for musicians, such as teachers and session artists. [1]:http://money.futureofmusic.org/how-many-musicians-are-there/ http://money.futureofmusic.org/how-many-musicians-are-there/ - "Other sources of data"

pathy 13y ago

Music streaming (be it Spotify or otherwise) is not the only source of revenue for musicians though. Touring, Merch and so forth also generate revenue. That said, most musicians obviously cannot live off their music.

brianmcc 13y ago

0.01%, not 0.0001% surely? I.e. 1 in every 10,000.

Bsharp 13y ago

I'm going to assume the revenue numbers you mentioned are US numbers. The entire population isn't trying to be musicians - you're only competing with other musicians for that money. This website[1] offers various estimates for the number of active musicians, but the numbers are quite scattered due to the subjective and numerous definitions of "musician" (orchestra player doesn't need royalties, rock band member does, music teacher doesn't, etc.). I'm going to use the number of albums produced to determine the number of active musical acts who would get paid by Spotify, which according to the source was 76,875 in 2011, and one album per active musical act seems reasonable. Assuming that is a US number for conservatism (not a global number) then we get 76,875 active musical acts competing for your $2.5B. Since most musicians won't assume that they will become superstars, using the 80/20 rule we'll chop off the top 20% of active musical acts and the top 80% of the revenue (which imo is probably most artists that anyone knows) to get 61,500 musical acts competing for $500M. Now lets assume 3 musicians collecting royalties per musical act (seems reasonable, lots of 4-5 member bands, lots of solo artists, conservative) for a total of 184,500 musicians competing for that $500M. $500M supports 11,111 people under your $45,000/year income assumption, meaning 6% of the bottom 80% of active musicians would get a livable income from Spotify alone. As other posters have pointed out, musicians have many other sources of income such as other streaming services, touring, record sales, merch, etc. So yes, since you have a 6% chance of earning a livable income from a singular source of music streaming while being in the bottom 80% of active musicians royalty-wise, I'd say it's definitely worth it to keep doing what you love. This also ignores the many non-royalty-based careers for musicians, such as teachers and session artists. [1]:http://money.futureofmusic.org/how-many-musicians-are-there/ http://money.futureofmusic.org/how-many-musicians-are-there/ - "Other sources of data"