$0 – Not applicable
$0 – $0.30 (£0.40 – $0.50)
$0.30 – $0.40 (£0.50 – $0.60)
$0.60 – $0.80 (£0.80 – $0.90)
$2.40 (1.50 cents) per album (approx)
$7.10 (6.60 cents) per song (approx)
The Spotify pays me more than the indie labels
If Spotify has a very low margin on their streaming service, it’s fair to say that the company is trying to make up for it by increasing royalties on royalties. Spotify is the only major streaming company to have a paid service which they are not yet competing with. Of its streaming service, Spotify pays around $0.60 per 1000 streams. When streaming costs a little more than that on top of paying for its other services, then it’s more likely to be on par with other major labels, rather than having one or two free services to choose from.
If Spotify doesn’t pay more per stream, then it seems unlikely they will have the same impact as the big labels
It’s unlikely Spotify will have a high margin, but it’s still possible that they will have a higher margin than the labels. This comes from the data points above which show the impact Spotify’s premium plans have on their streaming users. As well as the number of streams per user, the top tier Spotify premium plans pay around $0.30. Spotify might have done this to ensure it would be able to keep its existing customers who pay $10/yr for their streaming service – and those customers would likely still be paying less per stream. This is why Spotify is starting premium plans which can take you up to a million users and still have a higher per stream payout.
If Spotify have higher margins than the big labels, so would other labels
This, of course, assumes that Spotify’s payments per 1000 streams have a higher ratio than royalties. In fact, it’s possible that Spotify could pay a higher percentage of a streaming bill to the labels than Spotify pays in royalties. That could be to avoid going into debt and also ensure that the cost of a service keeps rising. When you are making a premium service which costs more than what you’d normally charge for your product, you can expect to see a higher proportion of your customers paying a premium.
event videography tips, filmmaking udemy, how to shoot videos, video production courses, see yourself while filming