Sam Duboff
Appearances
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, yeah. Generally, major labels take a bigger cut and you label somewhere in between. And then if you're self-releasing your music, it's all you.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, and basically that's the trade-off. You get all the big advance up front that can let you pursue your career in music. You're going to get this whole giant team around you helping you grow. And then, you know, you negotiate your terms up front. Yeah. Yeah, that math, you know. I think a lot of artists end up signing deals without totally knowing what that math is going to mean.
Nicky at Night
How much does Spotify actually pay Artists?
And then later on they're wondering why they aren't seeing more money from streaming.
Nicky at Night
How much does Spotify actually pay Artists?
you're getting at all the complexity of it where artists and songwriters hopefully more and more are starting to understand what they're signing before they sign it. But they often might not realize those terms until it's too late, until it's later on. And yeah, that's where it gets really challenging.
Nicky at Night
How much does Spotify actually pay Artists?
And I think also it's kind of almost an accounting question. When the artist gets a big advance, the reason the label's paying that advance is cause of the streaming royalties. They know how much money is coming in. Yeah.
Nicky at Night
How much does Spotify actually pay Artists?
streaming royalties are paying that advance but it feels like it's coming from the label and obviously the label has other sources of revenue too but that's part of it you kind of think oh i should be getting these royalty checks i already got that advance that's from the label it's like actually you know over 80 of a lot label revenues coming from streaming that's what's paying the advance and a lot of artists don't think about that as part of what they're earning from streaming
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, I mean, this is why I'm so passionate about more transparency for artists in the music industry, because it's really about the options they have, just like you're saying. For some artists, they're going to want that big advance to, you know, let them focus on their art. They might want a big team around them. They might not feel as comfortable doing it themselves.
Nicky at Night
How much does Spotify actually pay Artists?
There's other artists who are going to want the indie label path where, you know, you get fewer services, you get to keep a bigger cut, but you still have a bit of a team around you. And, you know, there'll be different terms there that can... you know, be a little bit more in the favor of the artist.
Nicky at Night
How much does Spotify actually pay Artists?
And then, you know, the $10 billion in royalties Spotify paid out last year, 50% of them went to indies. And so that's indie labels and artists who are self-releasing their own music. And so for some artists, they want to build their own team around them. They want to do things themselves. They're figuring out how to use all the tools themselves. And they're keeping 100% of the royalties there.
Nicky at Night
How much does Spotify actually pay Artists?
All these options are great. I talk to artists all the time. My family members are creatives, and so I know how hard that path can be. For some artists, you just want to be able to focus on the art, have a big team do it around you, and you trust them to do it, but the finances can get quite confusing.
Nicky at Night
How much does Spotify actually pay Artists?
There's some artists who are way more entrepreneurial, and there's artists making millions a year on Spotify who are keeping 100% of the royalties It's pretty straightforward for them. They're releasing the music. All the money comes in, goes straight to them. That's great, too. That's not for everyone.
Nicky at Night
How much does Spotify actually pay Artists?
And the importance of transparency is for artists to get, here's the pros and cons of each option, right? Totally. Like, what is a traditional label deal? What's an indie label mean? What tasks do I have to do if I'm doing a DIY?
Nicky at Night
How much does Spotify actually pay Artists?
That's right. Yeah. At Spotify, we're like, our role is to pay out as much money as possible. to rights holders that artists and songwriters are selecting. And so the more that artists and songwriters know their options, are thinking thoughtfully about what path they do, there's great paths available now because so much money is getting paid out, right? That's the good news.
Nicky at Night
How much does Spotify actually pay Artists?
Maybe 10 years ago, there wasn't enough money to go around. Now there is every year across Spotify and all the other streaming services. There's so much money to be made. And so now that's putting artists more in control. they can think, all right, here's the options I have. Here's, you know, the team I might need around me. Let me talk to other artists and learn what that might look like.
Nicky at Night
How much does Spotify actually pay Artists?
Well, I appreciate that. The music industry is so confusing. I worked at Spotify a little over six years and I learned something new every day. Yeah. It's like... famously opaque industry. So we're trying to play our part in being as transparent as we can. And it's hard being an artist.
Nicky at Night
How much does Spotify actually pay Artists?
You know, there's great creators like you are helping to educate artists about, you know, what they might need to navigate their career. And so once the money's there, we hope that's going to trickle down to artists understanding they have more options and they can think about what the best path for them is.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, it's so critical. And a lot of these contracts can be, you know, can stay with you for years. So artists being really thoughtful about who they're partnering with, the team they want around them. Hopefully there's more and more educational resources out there for them to start to navigate it because it's big decisions and a lot of artists just want to focus on the music.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, there's some really challenging parts of the music business. The part that's kind of beautiful and works really well is that 67 cents. It's that for every dollar we make for music, that's more money going to artists and songwriters, writers. So for 10 years ago, Spotify had like 15 million subscribers. Now we have over 250 million subscribers.
Nicky at Night
How much does Spotify actually pay Artists?
That's aggressively investing and launching in hundreds of new markets. We're in 180 markets now. billions of dollars in marketing to get people to understand why they would pay for streaming, to pay for streaming, all the engineering costs, building it, the legal costs, and so on. The team that licenses all the music. And so that's how we got to where we are today.
Nicky at Night
How much does Spotify actually pay Artists?
By us growing our business from 10 years ago, quite small, to what it is today, that's what's grown the royalty pool from one billion a year to 10 billion a year. Yes. Right. It's the same thing.
Nicky at Night
How much does Spotify actually pay Artists?
And so incentives are really aligned. And that's the part that's great, even though, yeah, there's a lot of parts that are pretty.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah. Like you go back 20 years to CDs and between the, you know, store, all the kind of middlemen between even the label to the consumer, it was more like 40 to 45% that would go out before it reached rights holders. Yeah. So 33%, you know, which is true across all the streaming services, way less than that because streaming is more efficient than shipping CDs all over the world.
Nicky at Night
How much does Spotify actually pay Artists?
But yeah, it's a tough business. There's a lot to build. It's a really competitive space and we're happy to be able to grow as much as we have.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah. I mean, this is, again, where incentives are aligned. We're trying to maximize the revenue we bring in, which maximizes the revenue we pay out to rights holders. And certainly, like, we want to continue growing the royalty pool as much as we can. We're going to keep paying out more and more. I think part of the solution has been just continuing to build streaming, right? Yeah.
Nicky at Night
How much does Spotify actually pay Artists?
Ten years ago, 2014, Spotify was paying out a billion a year. Now it's ten times that.
Nicky at Night
How much does Spotify actually pay Artists?
I want to say this sensitively because there's so many artists out there who want a bigger career in music than they have, but there's a lot of artists making a ton of money off Spotify right now and not always as vocal on social about it. They're focused on their art as they should be. We're not doing that for charity. They're earning the money.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah. So my team's working on building all the products and features for the music industry. So Spotify for Artists is, you know, your listeners probably use Spotify as a consumer. The other side of the coin is Spotify for Artists, which pretty much every artist manager or person who works at a label uses over a million people use it every month.
Nicky at Night
How much does Spotify actually pay Artists?
But we're talking about 1,450 artists generating a million a year from Spotify, 12,000 artists generating $100,000 a year from Spotify, half all this money going to indies where artists might be keeping a lot of it. Label advances going up because the labels know so much streaming royalties are going to come in. You know, you're a successful video creator.
Nicky at Night
How much does Spotify actually pay Artists?
You know how many more people are trying to make it on TikTok and Instagram than are able to make money doing it like you do. Same is true for music. There's now 12 million people who have uploaded at least one song to Spotify, which is great. Like 20 years ago, you couldn't do that. You'd have to pay to print a CD and mail it to someone.
Nicky at Night
How much does Spotify actually pay Artists?
Now it's so fun that you can upload three songs and send it to your friends and family with a link. that growth, the growth of people uploading to Spotify, that's always going to outpace the number of artists making it. But, you know, one of the things Loud and Clear is showing is that the number of artists making it is increasing massively, right?
Nicky at Night
How much does Spotify actually pay Artists?
From, you know, triple from 2017 to 2024, the number of artists making $1,000 through to $10 million has tripled. You know, the global superstars you talk about on your show sometimes, the 70 biggest artists in the world are all generating
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, and part of this is Spotify is the biggest streaming service. We're the biggest funder of music royalties. We're contributing more than any other company. Because of that, artists should hold us accountable to pay out more. I want them to get paid more too. That's what we're working on. And so part of this is, yeah, totally in good faith. Artists should hold us accountable. We love that.
Nicky at Night
How much does Spotify actually pay Artists?
Part of what we're doing with Loud and Clear is each artist only knows their own experience, right? You have your own label deal, your own publishing deal. Maybe you're DIY and you're collecting all the money yourself, but you aren't able to get that bigger picture of how many artists are succeeding in streaming. And so, yeah, I think there's some great structural changes that could happen.
Nicky at Night
How much does Spotify actually pay Artists?
Some of them you're talking about, but also part of it's like, let's just bring more transparency to the industry, right? Yeah. How much is each streaming service paying out? What are traditional label deals? How much are artists taking home? I think the more we normalize talking about those things, company sharing those things, the better.
Nicky at Night
How much does Spotify actually pay Artists?
So Spotify pays out the same as every other major streaming service, which is not a fixed amount per stream. If you think about it as a listener, you're paying $11, $12 a month. In the US, you pay the same amount no matter how much you stream. If we paid out a fixed amount per stream, there'd have to be a limit to how many songs you can stream, something like that.
Nicky at Night
How much does Spotify actually pay Artists?
And it's the way artists can access how their music appears on Spotify. So my team's working on building all those products, you know, video features, promotional features, analytics, as well as all the education for artists in the industry. We publish a lot of uh, videos, blogs, uh, you know, live streams, trying to explain how Spotify works, how the music industry works.
Nicky at Night
How much does Spotify actually pay Artists?
The way every streaming service pays out is called stream share, which is complicated, but we can simplify it a bit, which is if you get 1% of the streams on the platform, you get 1% of the royalty pool. It's on a percentage of consumption basis.
Nicky at Night
How much does Spotify actually pay Artists?
Exactly. That $10 billion a year, you're getting 1% of it.
Nicky at Night
How much does Spotify actually pay Artists?
So yeah, one of the data points we shared in Loud and Clear this year is last year in 2024 for the first time, if you got one in 1 million streams on Spotify, out of all 1 million streams, you just need to get one, you generate more than $10,000, which is pretty solid. 10 years ago for one in a million, you'd get 1,000. It's 10x now.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, yeah. I think like a lot of people, because of the way that video services pay out, are used to some fixed amount per impression. And streaming doesn't work that way at all. Yeah, one of the most confusing parts of streaming is if you're an artist, all you're receiving is... your paycheck and you see the number of streams. So it's easy to do that math.
Nicky at Night
How much does Spotify actually pay Artists?
You feel like it should be related, but often it's kind of inversely related to what you want a streaming service to do. So I'll explain what I mean. Imagine there is a streaming service where it pays out a dollar per stream. an artist would be like, oh my God, that sounds amazing. That'd be incredible. So then you kind of think through what is a streaming service priced?
Nicky at Night
How much does Spotify actually pay Artists?
Since all streaming services have the same music, you know, tends to be priced pretty similar, $11, $12. It's hard to price much more than that. If a service is paying out
Nicky at Night
How much does Spotify actually pay Artists?
a dollar per stream that means the average subscriber is only listening to like 10 songs a month right you're okay you're paying yeah twelve dollars let's say ten dollars nine dollars is going to rights holders if that service is paying that much per stream on average it means that subscriber is only listening to to 10 songs so you know what i think i think i get what you're saying what would be true about that streaming service if you had a streaming service where people paid 12 a month but they only listened to 10 songs a month
Nicky at Night
How much does Spotify actually pay Artists?
You know, you'd look at it, you'd be like, oh, a dollar per stream, but it's probably not a very engaging streaming service. It's not inspiring people to listen to a lot of music. Subscribers probably aren't going to retain. If you're only listening to 10 songs a month, you're probably not going to keep paying $12 a month because you're not getting that much value from it.
Nicky at Night
How much does Spotify actually pay Artists?
You're not discovering new artists you're going to go see live. It's not going to have strong word of mouth because it's probably not that engaging a product. What you want is a service where... People are listening to tons of music. Yeah. Right? They're paying the same no matter what. You want them listening to thousands of songs per month because that means they're discovering new artists.
Nicky at Night
How much does Spotify actually pay Artists?
They're loving the product. They're retaining and subscribing over time and not canceling. They're going from the free tier to the paid tier because they love it so much. Those are all things that make the calculated per stream rate go down, right? Because it's more streams for the same money. But that's what makes... a product grow, right?
Nicky at Night
How much does Spotify actually pay Artists?
That's why Spotify is growing payouts so much faster than other services, because people on Spotify listen to the most music.
Nicky at Night
How much does Spotify actually pay Artists?
My team's living and breathing, uh, everything artists are asking us about, um, through our help center on social 24 seven. We try to put together, you know, materials to help them understand it better.
Nicky at Night
How much does Spotify actually pay Artists?
So it's kind of this counterintuitive thing where you're like, oh, I've calculated this per stream rate. That should be high, right? But actually, given how StreamShare works, how streaming works, you want a service that's maximizing your paycheck, not your per stream rate. So you want a service with high engagement where subscribers love it, keep signing up, and get new people to sign up.
Nicky at Night
How much does Spotify actually pay Artists?
That's just a calculation they're doing later. It has nothing to do with how much the service is paying out. They're just, you know, after the fact, looking at how much money they made, looking at their stream count, and dividing them. And just doing the math. I get what you're saying.
Nicky at Night
How much does Spotify actually pay Artists?
And the graphs, I think, that are more valuable. If you ask an artist, do you want a bigger paycheck or more money per stream on average, people want more money. You want a bigger paycheck. So that same graph, if you do it by payout, Spotify is number one. We're paying out the most. There was a recent study done last fall by a third-party research firm, and they...
Nicky at Night
How much does Spotify actually pay Artists?
basically asked the entire network of indie labels, indie distributors, a bunch of indie artists, how much money they're making, sources of revenue. Over 50% of streaming revenue for the average indie is coming from Spotify. And so that's because it's such an engaging service. It's because listeners listen to so much music.
Nicky at Night
How much does Spotify actually pay Artists?
The same things that are making that calculation, the per stream rate, low. Those are the reasons that we're paying out the most. That's why the paycheck is high. So I'd love to see, you know, on every graph of per stream rate, I'd love to see that next.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, but another way to think about it is same music catalog on all services, you have the same chance to get one in a million streams. That's how all streaming services pay out based on that idea of one in a million, one in blank. For the same level of popularity on Spotify, you make more than any other service. Interesting.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, I mean, certainly... the low price point has allowed us as an industry across all streaming services is over 500 million paying subscribers now. This is a brand new model and piracy was really easy, right? Like destroyed the recorded music industry almost overnight.
Nicky at Night
How much does Spotify actually pay Artists?
And so entering the market at a price point that gets people used to paying a subscription for streaming is the right thing to do. And I think that's why we've reached half a billion paying subscribers across all the services. To your point, yeah, I think it's a really, really good deal. Probably, you know, too good a deal. And we've raised prices a little bit the last few years.
Nicky at Night
How much does Spotify actually pay Artists?
And yeah, when we raise prices, that means more money for rights holders too. Right. Yeah, we'd love to see that. So I agree. I think it's a really, really good deal.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, fans do not celebrate a price increase even though.
Nicky at Night
How much does Spotify actually pay Artists?
yeah and yeah another factor too is you know versus video services where you have your originals and exclusives that keep people there um and streaming it's the same music catalog on all the services so when you raise prices if people don't want to pay more uh even if that's going to help artists and songwriters get paid more you switch to the same music somewhere else and i think that's why you're seeing all the streaming services kind of more delicately raise prices the last few years yeah
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, I think it'd be great if fans kind of saw some of the price increases across any service that way. Because, yeah, streaming's a really, really, really good deal right now. It already was a really good deal 10 years ago. The price hasn't changed so much. It's a really good deal.
Nicky at Night
How much does Spotify actually pay Artists?
Right. And I hope right after you like discover bad bunny, cause you don't have to pay extra to listen to him. Then you go on and buy his vinyl and go to a show and buy his collaboration with some fashion brand. Yeah. Streaming is kind of the gateway to all those other revenue streams.
Nicky at Night
How much does Spotify actually pay Artists?
it is a tool for discovery and the conversion is the concert ticket the conversion is the merch whatever i know whatever part of the way we've thought about it is 20 years ago you had this separation of radio stations and the record store yeah on the radio is where you discovered music and then the record store is where you went to purchase the music and that was the end point streaming brings those two things together so it is discovery but it's also consumption and library and where you return to your favorite i
Nicky at Night
How much does Spotify actually pay Artists?
I mean, it's not like actually A or B. But then, yeah, but then it's also this gateway to all those other revenue streams. So it's like, you know, both of those things. And it's also kind of what's exposing people to all the music that they go out and yeah, not even just concerts and vinyl and merch and brand collabs, but like, you know, uh,
Nicky at Night
How much does Spotify actually pay Artists?
live streams and listing parties and all the other innovative ways that artists are making money now.
Nicky at Night
How much does Spotify actually pay Artists?
I could, I could talk about the music industry all day.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah. What I'll add for Spotify is for us, because of some of those rules, we don't let you upgrade to premium through the app. Yeah. So it's a missed revenue opportunity. Right. The more people we get to sign up for premium, the more money that's going to music rights holders, the more we're growing the music industry for us, because, you know, two of our.
Nicky at Night
How much does Spotify actually pay Artists?
three biggest competitors also have an app store, have a phone ecosystem. For them, they can upsell in all different ways they want to get people to sign up for the service. For us, since we don't have our own phone hardware, we can't promote upgrading to premium in a bunch of different ways in the app and in ways that would help
Nicky at Night
How much does Spotify actually pay Artists?
People upgrade to subscribe, more money for the music industry, for artists, for songwriters, growing it all around. And so, yeah, for us, it's really that missed opportunity. It's not that any of your Spotify premium money is going to the app store. It's that we're missing out on people that we could kind of help to upgrade because of those rules.
Nicky at Night
How much does Spotify actually pay Artists?
And our competitors are able to put as much upsell as they want.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, yeah. I think there's all these, you know, phones and the App Store and this whole app economy developed so fast that a lot of the rules and regulations haven't kept up. And, you know, for something like the 30% App Store tax, that's leading to higher prices to consumers because the app developers have to raise prices to accommodate it.
Nicky at Night
How much does Spotify actually pay Artists?
Right. We need music to work as a standalone business. And our competitors don't. And I think that's one of the reasons you see us able to grow royalties faster than other streaming services have as a We are investing so much more in making the music experience new, innovating, trying to make sure that listeners love our service. And we aren't trying to sell hardware or shipment subscription.
Nicky at Night
How much does Spotify actually pay Artists?
Yeah, when I go to work every day, all people are doing is talking about music 24-7. Like everyone who works at Spotify is obsessed with music. We need music to work as a business. We're obsessed with innovating and new ways for listeners to experience music. And that's cause we're a standalone company that's focused on growing this business. And that's what makes it fun to work there.
Nicky at Night
How much does Spotify actually pay Artists?
And I think it's also one of the reasons we've been able to succeed.
Nicky at Night
How much does Spotify actually pay Artists?
these rights holders which for most cases is a music label but can also be um i believe it's like a distribution software like a distro like a lot of artists can um sign up for distributors they pay a few dollars a month that distributor sends the music to spotify and other streaming services and the artist gets 100 of the royalties interesting so in that situation we'll use distro kid as an example yeah spotify pays distro kid
Nicky at Night
How much does Spotify actually pay Artists?
district kid pays artists yeah that's right okay and in that case the artist is the rights holder because they're retaining yeah 100 right yeah it goes through these distributors who you know handle distributing it everywhere collecting the money lots of other tech stuff uh and so the artist is paying a subscription to them they get to collect all the money interesting um so yes spotify is never paying artists and songwriters directly ever at all in any case yep a label a distributor a publisher um and so on okay that is interesting yep um
Nicky at Night
How much does Spotify actually pay Artists?
That's right. We don't own any music. We don't deliver any music to Spotify. We don't pay any of those creators directly. It's always through a rights holder. Interesting. And that's true for every streaming service, not just us.