Spotify Streaming Data 2020: How It Affects You
Spotify have released their streaming data, and it further proves streaming is thriving like never before. It has been key in helping artists to build a name for themselves and develop a global audience on their terms. It opens the doors for creativity, anarchy and innovation within the music industry. We are seeing more genres, more collaborations, more artists and just, well, more!
Streaming services like Spotify are leading the charge, yet I can’t tell you how many times I still hear that “there is no money to be made in streaming.” Well, I guess those people are about to eat their words.
In the last 7 years the global music industry has grown by more than 40%. What might come as a surprise is that change has been driven primarily by streaming revenues which have increased by 500% in this time.
Accoring to their recent streaming data, Spotify alone paid more than $5,000,000,000 out in streaming revenues in 2020. That made up almost 20% of the record music revenue across the globe. That number is enormous, and that is just one streaming service of many.
How Has Spotify Changed?
Back in 2018 Spotify CEO Daniel EK set out a new mission statement to “enable one million artists to live off their work.” That is spotify’s goal now. They have become a platform renowned for driving discovery and using playlisting to bolster artists forward.
Spotify has a term known as “top tier” which refers to the artists making up 90% of the service’s streams. This has been increasing, year on year. In 2015 this was at 16,000, now, it is at 57,000. Yes, it is a slow journey to one million, but, there is clear progress being made.
Does It Only Help Big Acts Then?
In a recent publication Spotify published figures around revenue. Since 2017, the number of artists generating:
– More than $50,000 per year: Up 80%;
– More than $100,000 per year: Up 85%;
– Over $1,000,000 per year: Up 90%.
The growth in streaming and revenue isn’t just limited to the big acts signed up the top labels on the planet. There is growth spreading across all levels of the platform, enabling more artists to press forward and develop a career in the music industry.
More artists join Spotify, and others, every single day. More artists want to share their work, more artists can share their work and more artists can earn from their work.
How Is Listening Behavior Changing?
Recent streaming data suggest that more than 30% of audience consumption on Spotify is a direct result of algorithms promoting discovery. With algorithms playing a pivotal role in altering the music landscape, Spotify now exhibits a large amount of control over the demand curve. The curation team have been working hard to create curated playlists which suit their listeners in view of driving discovery.
How Can I Make Money On Spotify?
Spotify makes money itself through subscription service charges for Spotify Premium and advertisers who purchase adspace for the free version of the platform. From this money, Spotify claims to pay approximately 66% to musicians as part of their “royalty pool”. In 2020, the royalty pool was $5 Billion.
The way that the royalties are paid out is based on “stream share”, that is, the share of streams each artist on Spotify has.
Isn’t The “Pay Per Stream” Low?
That’s just it, there is no exact price per stream. We know, that makes it annoyingly complicated, but here is the thing. Listeners do not pay per stream. They pay monthly fees or listen to advertisements that generate money for the streaming platforms. Because of this, Spotify cannot guarantee a price per stream or 100 streams. They have no way of guaranteeing a fixed level of revenue on their end for 100,000 streams and therefore don’t have a fixed price they pay artists.
In order to be more transparent about streaming, Spotify have launched “loud and clear”. Loud and Clear is a project spotify claims will enable artists to gain more insight and understanding about music streaming economics.
Will This Change Your Earning Potential?
In short, if top level streaming continues to be distributed among a wider number of artists, revenue is going to be split in a much broader way. As a result, up and coming musicians will see more royalties landing in their pay packet…
What Should I Do?
You want to maximise your revenue return. Spotify receives the most streams out of any platform but there are other platforms out there that can help you earn too. You should seek to get your music on all of the most popular streaming platforms around the world. That way, you’ll have several platforms all bringing in listeners, fans and revenue.
Are you looking to get your music out there? With Identity Music you can get your music all over the globe in order to gain the maximum exposure. By using our distribution and music promotion services, you’ll be able to take control while watching your music reach new heights.
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