How to make money on Spotify

Founded by Daniel Ek and Martin Lorentzon, on 23 April 2006, Spotify is basically a media service provider. It is one of the largest music streaming platforms around the world.

It has more than 420 million monthly active users which also includes 182 paid subscribers. Available in more than 180 countries, Spotify features listening to albums, genres, and artists. It also allows a user to create, edit, and share a playlist.  

The music industry is prospering and people are earning more and more money through it. Similarly, this article is dedicated to how Spotify pays the artists and how you can earn money with Spotify.

How to Make Money on Spotify in 2022?

1. How much does Spotify pay per stream?

Spotify pay per stream rate ranges from $ 0.003 to $0.008. It simply means you need 250 streams to earn a dollar on Spotify.

There are possibilities of a lesser amount after the distributor cut a fee from the earnings. 

Spotify's payout system and rates have changed over the years. Here is how we are observing these changes: 

  • In 2014, the average pay per stream by Spotify was $.0052. 
  • In 2016, Spotify's average payout rate was reduced to $.00437. 
  • In 2017, the average pay per stream again dropped to $.00397.  
  • Currently, Spotify pays $ 0.003 to $0.008 per stream. 
  • According to RIAA (Recording Industry Association of America), album sales are replaced with paid subscriptions.

     The pandemic has affected physical product revenue and it has dropped by 23%. This way, music streaming income has become more critical for artists.

    2. What is a stream?

    A stream on Spotify is when a song is played for over 30 seconds. When someone listens to a song for at least 30 seconds, it counts as a stream on Spotify regardless of what song was played before. 

    If you play a song for more than 30 seconds, and then again you play a song for more than 30 seconds, that will be counted as two streams.  

    Spotify algorithms are now excellent at detecting bot streams. If you try to grow your plays and streams with a bot, that will not help. In fact, this can lead to banned songs or banned accounts. Spotify can take your account down if you use a bot.

    3. How do Spotify’s streaming royalties work?

    Spotify royalties are the payment earned by the artists from streams. Spotify collects money from ads and subscription fees and distributes that money from the net revenue as royalties. It pays monthly to the artist. 

    Spotify's streaming royalties work in a simple way. When someone plays or streams a song, the payment is recorded for the artist via Spotify. The stream royalties are paid through distributors. Spotify's streaming royalties payment system is simple as well as straightforward.  

    Firstly, it pays the right holder. Next, it pays the distributor. And at last, it pays the artist. Spotify pays thousands of artists every month by keeping an easy-to-understand system.

    4. Different types of royalties

    To understand making money on Spotify, you need to understand the different types of royalties on Spotify. There are two types of royalties you can earn from Spotify:

    1. Master Rights Royalties: Master rights royalties are the income from streams. If you are the person releasing the song, podcast, or audio, Spotify directly transfers this to your digital music distributor. This royalty is for the person who releases. 

    1. Mechanical Reproduction or Performance Rights Royalties: Spotify pays performance rights royalties to the composer, publisher, and lyricist of every song through the performing rights organization.

    2. A few examples of such organizations are ASCAP (US), BMI (US), PRS (UK), SGAE (ES), GEMA (DE), SACEM (FR), and SUISA. Earlier, this type of royalty was earned from physical recording. However, today, it also includes private streams. 

    When you self-release a song, i.e., you are the songwriter and the label. You hold both master rights royalty and mechanical rights royalty. In this regard, you receive a royalty from both sources

    5. How does Spotify pay its artists?   

    Spotify transfers the artist’s revenue to the music distributor after 3-4 months of stream completion.

    The artist’s payment on Spotify is handled by the distributor, just like musicians use digital music distributor services. It doesn’t pay directly to the artists.

    This way, Spotify ensures to manage a streamlined process that maintains the standard. 

    Spotify makes sure that the tracking is centralised involving the composer, songwriter, and publisher.  

    Artists can view their revenue on their distributor’s dashboard and transfer the money to a PayPal account.  

    It is to be noted that Spotify counts a stream only if a song is played for more than 30 seconds. Anything less than 30 seconds will not be counted as a stream.

    6. How to increase your earnings on Spotify? 

    We’ll start with some obvious but most important tips to increase your earnings from Spotify. Here are the ways that can really improve your Spotify earning journey:

    • Make good music so that people stick to it and listen for at least 30 seconds. 
    • The Spotify algorithm detects low-quality music as people do not play it for even 30 seconds. 
    • Bad performing songs are the songs with drawn and long introduction parts. The Spotify algorithm avoids such songs. 
    • Focus on targeting high-income countries like the UK and USA. Generate streams and revenue by seeking playlist placements. 

    Here are some more ways that help you increase your revenue on Spotify: 

    • Spotify Analytics: Surprisingly, Spotify allows you to plan a tour with its analytics. It features roadmap data, and route planning through the cities you’ll be listening to the music. 
    • Promote your concerts on Spotify: You can promote your concert on Spotify. You can add your concert date by signing up for Songkick. Songkick is a platform to buy and sell concert tickets. Your listeners can see your concert dates and book the same. Other platforms like Songkick are Ticketmaster, AXS, and Eventbrite. 
    • Sell merch on Spotify: Nevertheless, you can sell merch on Spotify directly to your fans. Sign up for MerchBar and create an account.

    7. How to get more streams on Spotify?

    Increasing stream count is the next big obvious question asked by artists.

    If only artists will get more streams, they will get paid more money. 

    One of the best ways to get more streams on Spotify is to collaborate with an established company that has worked with thousands of big artists.

    Such companies run campaigns that get you organic streams with maximum royalties. 

    8. Other streaming platforms 

    Other streaming platforms like Spotify are Apple Music, Amazon Music, Google Play, and Youtube Music. Here is a list of how many streams do artists require on different platforms to earn a dollar: 

    Platforms 

    Number of Required Streams 

    Spotify 

    250

    Apple Music

    200

    Amazon Music 

    200

    Google Play 

    64

    YouTube Music

    573

    CONCLUSION

    You cannot make money on Spotify by just uploading one song or one album. Even if people are streaming your one song or album, this won’t pay you well.

     It is best to use all ways to enhance your revenue on Spotify. Royalties will only start to get bigger after you hit thousands of streams.

    Leverage your songs but don’t forget to build other streams of revenue. You can make a site, sell CDs, merch, and concert tickets, and make paid admissions to parties.

    Frequently Asked Questions (FAQs)

    Q1 How much does Spotify pay per 1000 streams?

    Spotify pays $4 per 1000 streams. 

    Q2 How many views do you need to make money on Spotify?

    You need streams to make money on Spotify, you need at least 250 streams to make one dollar. 

    Q3 Who is No1 Spotify?

    Ed Sheeran is the no. 1 Spotify. 

    Q4 1 million streams on Spotify money?  

    One million streams on Spotify will make around 3,11,268 dollars.

    Q5 How much does Spotify pay per monthly listener?

    Payment for monthly listeners depends on the number of streams and accumulated revenue.

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