In effect, yes. Given that ~70% of revenue goes to rights holders, making the amount of revenue bigger by not paying 30% of subscriptions to Google, the savings are passed on to rights holders.
It’s net revenue split to rights holders according to the share of streams. If you have 1% of all streams on Spotify in a given time period, you get 0.7% of net revenue for that period.
How the rights holders distribute the money onward to the artists is not exactly transparent though.
…I mean, 30% of the savings go to Spotify, so some part of it will indeed go to stock buybacks and executive salaries. Some of it will go to regular employee salaries, and some of it will go to pay for technical infrastructure, and some of it will go to pay for offices. Some of it will be spent on marketing, even.
Spotify announced stock buybacks in 2021 that were greater in total that they most likely will pay artists in that same timeframe. Doing so artificially depresses the the amount of their revenue that’s counted as profit, which is what they use to calculate artist royalties.
Again, not true - the royalty payments are based on revenue, not profit.
To understand how absurd the claim that royalty payments are based on profits is, consider that Spotify has had a grand total of two profitable quarters throughout its whole existence - are you seriously claiming that no artist ever got paid outside those two quarters?
The real problem with the way Spotify distributes the money, is that they distribute it per play. This seems reasonable on the surface, but I think it’s pretty shit. I want my subscription fee to go to the artists I listen to. Right now they’re going to what most people listen to. This effect is worsened by the per-label deals: imagine if Beyonce wasn’t on Spotify, that would be bad for Spotify right? This gives her label (and by extension all major labels) massive leverage over how this works. It massively favors big artists.
The per-play model also enables playfarming as an economically viable scam.
Huh? If you listen to obscure music, they are paid for that, if you don’t they don’t. They base it of what people listen to, in the exact same way it would work if it was watermarked like you want it to be
My understanding is that they don’t split your subscription fee up to the people you listen to. They base it on who all of their subscribers are listening to. So even if you listened to your favorite obscure artists 24/7, they might not get a dime if nobody else is listening. However, a sizeable chunk of your subscription will go to whoever is most popular on the platform even if you didn’t listen to them at all.
No it wouldn’t. Imagine a hyper-small version of Spotify with two artists and two subscribers. The fee is 10$ per user, distributed fully to the artists (to make the math easy).
User A only listens to artist A, user B only listens to artist B. BUT: user A listens to artist A 30 times a month, while user b only listens to artist B 10 times a month. Artist A gets paid 15 of the 20 total dollars - user B is paying for some of artist A’s fee, even though they’ve never listened to them.
My Spotify subscription is paying for the artists most put on large playlists, the ones most played by fitness centers and cafes, and for botfarms. I want it to pay the artists I listen to.
I like how in a thread discussing how Spotify had been lying about their cost structures you’re continuing to take their word for how fairly they compensate artists.
So lets assume they make $65 million in profit every quarter between when that article came out and April 21 2026 (the period the article states they were doing buybacks). I count 18 quarters in that period. So if my math is correct that is $1.17 billion in “profit” in the same period of time they plan to do $1 billion in stock buybacks. But artists are only getting 70% of said profits. So that’s about $819 million to artists in the same period of time Spotify is doing $1 billion in stock buybacks.
So we have a mega corporation playing creative accounting and doing stock buybacks instead of paying artists more. Classic.
lets assume they make $65 million in profit every quarter
Where do you get this number from?
Hasn’t Spotify been operating at a loss for most of its existence? Wouldn’t that mean they paid 0€ to its creators most quaters (if it was actually calculated off profit)?
And Spotify pass these savings onto the artists, right?
In effect, yes. Given that ~70% of revenue goes to rights holders, making the amount of revenue bigger by not paying 30% of subscriptions to Google, the savings are passed on to rights holders.
So, not exactly to the artists. I get the impression you seem to know quite a lot about the deal, can you try to analyze how this 70% gets divided?
https://support.spotify.com/us/artists/article/royalties/
It’s net revenue split to rights holders according to the share of streams. If you have 1% of all streams on Spotify in a given time period, you get 0.7% of net revenue for that period.
How the rights holders distribute the money onward to the artists is not exactly transparent though.
I suspected that much, it must be a complicated matter with many different cases, considering how music is produced. Thank you for your insight.
Any time.
To be clear, I don’t think this should be taken as a defense of Spotify. I just think that these misconceptions distract from more valid criticisms.
Thus could mean that 69% of revenues go to rights holders A and B and 1% of revenues are spread between holders C - Z.
Nah the savings are probably being mostly passed on to stock buybacks and executive salaries
…I mean, 30% of the savings go to Spotify, so some part of it will indeed go to stock buybacks and executive salaries. Some of it will go to regular employee salaries, and some of it will go to pay for technical infrastructure, and some of it will go to pay for offices. Some of it will be spent on marketing, even.
70% of it will go to rights holders, though.
Spotify announced stock buybacks in 2021 that were greater in total that they most likely will pay artists in that same timeframe. Doing so artificially depresses the the amount of their revenue that’s counted as profit, which is what they use to calculate artist royalties.
https://techcrunch.com/2021/08/20/spotify-to-spend-1b-buying-its-own-stock/
Again, not true - the royalty payments are based on revenue, not profit.
To understand how absurd the claim that royalty payments are based on profits is, consider that Spotify has had a grand total of two profitable quarters throughout its whole existence - are you seriously claiming that no artist ever got paid outside those two quarters?
According to this random site with no sources the ranking is: Napster, Tidal, Apple, YouTube Music, Deezer, YouTube, Spotify, Pandora.
Wonder where SoundCloud fits in.
Pretty sure no one uses that for exclusives only because it will get so few plays
deleted by creator
The real problem with the way Spotify distributes the money, is that they distribute it per play. This seems reasonable on the surface, but I think it’s pretty shit. I want my subscription fee to go to the artists I listen to. Right now they’re going to what most people listen to. This effect is worsened by the per-label deals: imagine if Beyonce wasn’t on Spotify, that would be bad for Spotify right? This gives her label (and by extension all major labels) massive leverage over how this works. It massively favors big artists.
The per-play model also enables playfarming as an economically viable scam.
Huh? If you listen to obscure music, they are paid for that, if you don’t they don’t. They base it of what people listen to, in the exact same way it would work if it was watermarked like you want it to be
My understanding is that they don’t split your subscription fee up to the people you listen to. They base it on who all of their subscribers are listening to. So even if you listened to your favorite obscure artists 24/7, they might not get a dime if nobody else is listening. However, a sizeable chunk of your subscription will go to whoever is most popular on the platform even if you didn’t listen to them at all.
No it wouldn’t. Imagine a hyper-small version of Spotify with two artists and two subscribers. The fee is 10$ per user, distributed fully to the artists (to make the math easy).
User A only listens to artist A, user B only listens to artist B. BUT: user A listens to artist A 30 times a month, while user b only listens to artist B 10 times a month. Artist A gets paid 15 of the 20 total dollars - user B is paying for some of artist A’s fee, even though they’ve never listened to them.
My Spotify subscription is paying for the artists most put on large playlists, the ones most played by fitness centers and cafes, and for botfarms. I want it to pay the artists I listen to.
I like how in a thread discussing how Spotify had been lying about their cost structures you’re continuing to take their word for how fairly they compensate artists.
They’re a public company, they’re required by law to share financial info.
Do you perhaps have better data though?
From what I understand that 70% they’re paying artists is from “profit.”
And from another comment in this thread:
And then you have stuff like this:
https://techcrunch.com/2021/08/20/spotify-to-spend-1b-buying-its-own-stock/
So lets assume they make $65 million in profit every quarter between when that article came out and April 21 2026 (the period the article states they were doing buybacks). I count 18 quarters in that period. So if my math is correct that is $1.17 billion in “profit” in the same period of time they plan to do $1 billion in stock buybacks. But artists are only getting 70% of said profits. So that’s about $819 million to artists in the same period of time Spotify is doing $1 billion in stock buybacks.
So we have a mega corporation playing creative accounting and doing stock buybacks instead of paying artists more. Classic.
Where do you get this number from?
Hasn’t Spotify been operating at a loss for most of its existence? Wouldn’t that mean they paid 0€ to its creators most quaters (if it was actually calculated off profit)?