Many musicians look at their stream numbers during the annual Spotify Wrapped campaign and celebrate. They shouldn’t.
Too many musicians are chasing stream stats instead of fair compensation for their work and Spotify’s annual marketing campaign, which packages listeners’ top artists, songs and genres and musicians’ respective stats, encourages this misguided focus through the release of these vanity metrics.
Let’s do the math.
Artists can expect to earn between $0.003 and $0.005 per stream on Spotify, which goes in their pockets or to the holder of music rights. Split the difference and go with $0.004 per play. So 1,000 streams translates to roughly $4; at 1 million streams, the payday is a mere $4,000.
A couple other numbers to consider: Spotify has 172 million premium subscribers and, in the third quarter of 2021 alone, revenue of $2.9 billion.
To be sure, financial compensation per musical performance depends on a plethora of variables: appeal, accolades achieved, experience in the field, notoriety and, yes, musical competency. But here is an example that offers some perspective on compensation of musicians by streaming platforms such as Spotify, Apple Music, Amazon Music and others.
Pre-pandemic, it was common for a semi-reputable contemporary jazz musician — B-list and some A-list artists — to be paid between $5,000 and $7,000 per performance before a live audience of 2,000 to 3,000 people. In a single performance, an artist could generate more money in a couple hours than a year of streams on a platform such as Spotify with, say, as many as 900,000 paid subscribers.
Now, most listeners faithfully consume the music of about 20 artists on a consistent basis. So those 900,000 followers are collectively paying Spotify approximately $9 million a month for access to their favorite performers. Time for more math.
If that cumulative sum of $9 million was divided among the 20 artists, each musician would receive $450,000 – not counting a per-determined percentage paid to Spotify for simply housing their albums on a digital platform.
And this is why there is no cause for musicians to celebrate the vanity metrics, depicted on snappy posters provided by the company, that come with the annual release of the Spotify Wrapped campaign. But countless musicians are mindlessly sharing their seeming success and celebrating what amounts to their status as sweatshop laborers. These vanity metrics are a mere band-aid for the deep wound of unfair compensation.
As a professor of music business and entrepreneurship, I want to shed light, not just expose the ugly financial realities of big music tech companies. And a caveat: I have albums on all the streaming platforms, including Spotify, because I know I cannot beat the system alone, hence, I might as well use the platform as a designation for my artistic library. To be clear, Spotify is not the only company to be called out. I am merely using them as a representative example of the bigger issue.
And so I have an alternative model to share with my fellow artists: Build your own email subscriber list – which, unknown to many in the artistic world, is the greatest platform for generating financial support.
Say, for instance, you diligently worked to accumulate 900,000 of your own faithful and enthusiastic email subscribers. You offer them your new album for $10 and just 1% purchase it. You’ve just made $90,000. Word spreads among your enthusiastic fans and you increase the response to 10%. You’ve just made $900,000 for one album – independently. Unimaginable for many artists, but even the more modest numbers should give you the drive to invest in yourself.
Aim for 1,000 loyal e-mail subscribers and you will have the base clientele needed to build a career as an independent digital-age music business professional who supplements music sales with offerings of courses and other products and whose dedicated fans help grow your following. It’s a new age for the music business and those who have ears, let them hear.
In my view, too many musicians are chasing the endorphin kick that comes from social media “likes” and comments rather than pursuing a viable, livable wage for art that improves the quality of life for the masses. We must do better, musicians. We must fight for our dignity.
José Valentino Ruiz is a multi-winning/nominated music artist, composer, producer, and arts entrepreneur. Ruiz is Head of the Music Business & Entrepreneurship at the University of Florida’s School of Music and the former Co-Chair of Business, Entrepreneurship, and Career Planning. His on-going ventures include working as Resident Media Composer for Hayden5; Director of Global Entrepreneurship Initiatives at the Diaz Music Institute 50C3; Global Ambassador at Worldwind Music Ltd.; and CEO at JV Music Enterprises. For contact: www.josevalentino.com.
IG: @josevalentinomusic