I need more info on how Spotify pays out royalties

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I need more info on how Spotify pays out royalties

Marcusosb
Casual Listener

 Hi I am an artist that has music on Spotify and I am seeking information on a topic that is not listed here nor anywhere else on your sight so please forgive me if this is not the correct department. Plus, if you do not have the answers, please send this inquiry to the correct department and have them answer me as soon as possible. I would like to know a little more about how Spotify pays for plays because your website does not have this information. That is, if Spotify pays out, for example, $0.0065 for one play, how does this $0.0065 splits up between sales royalty (for the master), mechanical royalty and performance royalty? In other words, what percentage of the $0.065 goes to each of these three royalties? I already know that the pay out for one stream fluctuates slightly every month but lets say that, for one particular month, Spotify pays $0.0065 per play. You can correct me if I am wrong here but it is my understanding that this $0.0065 splits evenly for all three royalties. That is, $0.0021 goes to the sales, $0.0021 goes to the mechanical and $0.0021 to the performance. Therefore, if an aggregator like Tunecore, for example, collects payment for 130,000 streams, for the month of May and the sales royalty they collected was $319.34 then the amount that should be paid to Tunecore for Mechanical royalty later on, is $319.34 and to BMI for performance royalty is $319.34 . Please correct me if I am wrong here.

8 Replies

Re: I need more info on how Spotify pays out royalties

user-removed
Not applicable

Hi there.

 

Thanks for message.

 

Spotify pays per every stream everytime your track is played and it pays out often - but payment is going to the label or aggregator.

 

How much you receive as artist, is totally out of Spotify's hands, it is label decision how much they pay.

 

In most cases most money aregoing to label itself. If you are unsure about your deal, ask your label or try to find another one who pays more to artists.

 

Hope this helps.

1 person liked this

Re: I need more info on how Spotify pays out royalties

Marcusosb
Casual Listener

Thanks for replying. I forgot to mention that I am an independent artist so I am representing myself as both label and artist. Tunecore is my publisher. I posted this query because I wanted to get an accurate and official understanding of what percentage  of the payout goes to each royalty. Once I get this, I would be able know how much money I would get for all the royalties. I would also be able to know if I am being under paid.

5 people liked this

Re: I need more info on how Spotify pays out royalties

JayLB
Community Legend

@Marcusosb

 

Hello:

 

I did a little digging at the help FAQ site for Artists on the Spotify service from this link here: http://www.spotifyartists.com/spotify-explained/ the pay out rates per stream is basically a mathematical formula, and many factors depend on how your stream payout rate is effected. 

 

"Spotify does not calculate royalties based upon a fixed “per play” rate."

 

 An artist’s royalty payments depend on the following variables, among others:

 

 • In which country people are streaming an artist’s music

 

 • Spotify’s # of paid users as a % of total users; higher % paid, higher “per stream” rate

 

 • Relative premium pricing and currency value in different countries

 

 • An artist’s royalty rate

 

You also might be able to get a much more general idea on how your payout rates are doing by going to your Tunecore Music Sales page, unless your music content is only on Spotify, you will probable want a much more general idea of everywhere you are getting revenue on the music services your music is on? But there should be a break down on the Music Sales page of how well and where your sales are at from the different music services. http://help.tunecore.com/app/answers/detail/a_id/8 Tunecore should have all the necessary tools for artists on their service to see where all royalty payments are coming from, and how those payments are broken down, and what the splits are between the three types of royalty payouts.

 

On the Spotify Artists FAQ page about music sales there is a possibility of being able to reverse engineer: "Of course, it is possible to reverse engineer an effective “per stream” average by dividing one’s royalties by the number of plays that generated them, but this is not how we measure our payouts internally nor is it a reliable yardstick for Spotify’s value to artists."

 

"Recently, these variables have led to an average “per stream” payout to rights holders of between $0.006 and $0.0084. This combines activity across our tiers of service. The effective average “per stream” payout generated by our Premium subscribers is considerably higher."

 

Are you an artist in the U.S. currently? Asking as there is a royalty rate payout music artists have a legal right to that ASCAP would also collect on your behalf as an artist, you would need to register with them though, which if I have it correct is the "Fee: One-time fee of $50 as a writer (free when you sign up through Songtrust) and $50 as a publisher." http://www.ascap.com/ 

 

If you are not an artist in the U.S. you might look into any Government oversight music publisher rights group, or any private music Publisher rights collection groups in your Country, these groups would collect music royalty payouts for you as well, percentage splits could vary though here with these groups? They have all the necessary tools to get a much better picture of how well you are doing on Spotify and other music streaming services with your music.

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-Jay

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Note I am not a Spotify Employee, I just help out around on the community!

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Re: I need more info on how Spotify pays out royalties

Marcusosb
Casual Listener
Thanks JayLB. This was very helpful.

Re: I need more info on how Spotify pays out royalties

rcutanda
Regular

hpguru wrote:

Spotify pays per every stream everytime your track is played

I have always wondered... Does a song need to be played from beginning to end to count as a "reproduction"? Sometimes, in my frequent playlists I find songs which I do hate, and I skip them after just 1-2 seconds. Does that reproduction count as a "play"? Is there a "minimum playtime" lenght required to be counted as a "reproduction"?

 

Thanks for the info :-)

Re: I need more info on how Spotify pays out royalties

mcproductions
Newbie
I would love to know this information too.
1 person liked this

Re: I need more info on how Spotify pays out royalties

İlkerAyas
Casual Listener

i heard about it's need to be listened by a user along 30 seconds. :)

Re: I need more info on how Spotify pays out royalties

kontolbewok
Newbie

The industry standard now is towards to 30 seconds counted as 1 play.

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