Music Streaming Profits Unveiled: An In-depth Analysis of Revenues Generated by Services Like Spotify, Apple Music, and Others
Freakin' Streamin' The Truth: A Breakdown of Earnings for Musicians on Major Platforms
Music has gone digital, and we're drowning in streaming services. Hanne Müller, founder of Yeebra, says that to be heard these days, you gotta be on Spotify, Apple Music, Deezer, Tidal, and more. Yeebra aims to help musicians with the distribution of their music, especially those who can't rely on big labels to support them. Müller shares that their earnings can vary: some artists make mere pennies a month while others bank thousands.
The Dark Side of Streaming: Musicians Get Swindled##
streaming accounts for a whopping 185.8 million euros, making up 85% of Austria's 254 million euro music market, according to the IFPI. Nearly 35% of households in Austria have a subscription.
Worldwide, music streaming produced 20.4 billion dollars (18 billion euros) in 2024. But wait, where's all that cash going? Typically, 70% of subscription revenues go to rights holders. Let's take Spotify, for example: for a premium subscription that costs just under 11 euros a month, they pay 7.7 euros to copyright and licensing societies, distributors, and labels. These parties then pay the musicians and composers as per their agreements.
Streams, Subscriptions, and Paychecks**
So, how much does that translate to per streamed song? It varies and depends on whether the tunes are played through family, premium, or ad-supported subscriptions. Revenue from each subscription type gets pooled together and distributed based on streams. The payout per stream ranges from 0.4 to 1.8 cents, which amounts to 4 to 18 euros per 1,000 streams.
Who pays the big bucks?**
As Müller explains, Qobuz pays the most at around 1.2 to 1.8 cents per stream, while Apple Music and Tidal compensate approximately 0.6 to 0.9 cents per stream. Spotify trails the pack, averaging 0.4 cents per stream. However, Spotify remains the market leader, handing out the most in total. In 2024, they paid out more than ten billion dollars to rights holders.
Differences in payouts aren't exclusive to varying subscription types; some services pay for trial subscriptions, while others, like Spotify, don't. Ad-supported subscriptions also contribute less to the artists' pockets.
You gotta reach at least 1,000 streams in the past 12 months to get your royalties, Müller explains, which is achievable even for bands with a decent fan base.
Spotify's Streamin' Snafu: Porn Between the Podcasts##
According to the Financial Times, Spotify planned to hike the prices for its premium subscription this summer, from 10.99 euros to 11.99 euros. Student, duo, and family subscriptions will also see an increase. New features like exclusive podcasts, hi-fi subscription with improved sound quality, AI-based Remix tools, and early access to concert tickets will be added for a small surcharge of roughly six euros.
Summer's Comin', Spotify's Upgradin'##
In Q1 of 2023, the number of paying subscribers grew by 12%, reaching 268 million worldwide. Revenue rose by 15% to 4.2 billion euros. The operating result was more than double, reaching 509 million euros, compared to 168 million euros in the previous year's quarter.
Streamin' Profits: Few Musicians Making Millions##
Most musicians aren't becoming millionaires from streaming. Out of the 12 million bands and musicians on Spotify, a mere 0.0125% made over $1 million in 2024, and only 0.6% made 10,000 dollars or more. For Austrian musicians, dreaming of such earnings is about as likely as hitting the jackpot at the casino. In most cases, their streaming earnings range between 5 and 100 euros per month, estimates Müller.
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- The majority of Austria's music market is dominated by streaming, which brings in 185.8 million euros and makes up 85% of the total 254 million euro market, as reported by the IFPI.
- The payout per stream for music streaming platforms like Qobuz, Apple Music, Tidal, and Spotify ranges from as low as 0.4 cents (for Spotify) to around 1.8 cents (for Qobuz).
- To reach the necessary threshold for receiving royalties on Spotify, musicians must accrue at least 1,000 streams in a 12-month period.
- Despite Spotify having one of the lowest per-stream payouts, they still hand out the most in total due to their vast user base, paying out over ten billion dollars to rights holders in 2024.
