The Spotify Money Flow

This is how the Spotify money flows.

Spotify is a business that offers streaming music to its users. Spotify gets its money mostly from advertisers and premium subscribers.

Like any other company, Spotify has costs such as staff wages, rent and rates for the offices, and server costs for all the computers that deliver the music. Spotify also needs to pay the record labels and publishers that provide the music in the first place. The record labels then give some of this payment to the artists who created the music and to the writers who wrote the songs. PRS for Music also collects some money for the songwriters, composers and music publishers. The key thing to remember is that as Spotify earns more money, the amount it pays back to the artists also increases.

So in the beginning, here’s what the Spotify money flow looked like:

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As Spotify grows and gets more advertisers and subscribers, it pays back more money to the record labels. In other words, how much money the musicians and writers get paid depends on how much money flows in to Spotify in the first place. The more successful Spotify is, the more successful the artists and songwriters are. As more people subscribe to Spotify Premium, the per-stream return increases. It’s almost as if each artist on Spotify is an investor and makes a share of the profit.

After a little while, here’s what the Spotify money flow looks like:

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So if you are concerned that your favourite band or singer is not getting enough money from Spotify, the answer is simple: subscribe to premium and help support the artists!

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  • Andreas

    They should do their homework first: better UI for artist/track/playlist management (for desktop and mobile version) and correct metadata.

  • Yeah, it’s time for a change. I’m eager for the upcoming update!

  • record company exec

    Artists don’t get anything from Spotify, the majors take it all because they own the company. Lady Gaga got $167 for 1 million streams. The only people who win from Spotify are the major record company execs. To put it another way it is like the poor feeding the rich and feeling good about it at the same time.

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