The minimum monthly price for a user to be included with Spotify Premium is US $10.75 ($9.99 if it’s sold in the US), but this is a much higher price than that of Spotify’s competitor, Apple Music. It’s not clear how much we can trust what Spotify is telling us, because the company can’t be sure that there really is a difference between the minimum monthly price and that of Apple Music.
How much does Spotify pay per 1000 plays?
Not surprisingly, Apple Music pays per 1000 plays, but if we assume that Apple Music paid only $0.01 per play, then it would have to pay $0.05 per 500 plays. In other words, if Apple Music paid $0.05 per 500 plays, then this would be the minimum monthly fee Spotify would have to pay.
The numbers here are based on a hypothetical monthly price of $12.00, but this will always change due to various factors including the market and iTunes pricing policies.
How big is Spotify’s licensing budget?
In a report released in 2005, Spotify estimated that it had roughly $2.5 Billion in worldwide licensing royalties, which it used to make up around 30% of the total revenue from song downloads and radio. Spotify has recently come under fire for the way it’s handling its licensing, and other major music streaming service like Spotify’s peers Apple Music, Rdio and Pandora have said that this may hurt their chances to succeed.
What is Spotify’s revenue sharing policy?
Spotify does not say, but it seems likely that it will pay out 85% of net income from streaming royalties to artists. Although there are cases when it goes down to a small share, the amount Spotify pays out per artist per stream goes down each time we look at the numbers more closely.
Here is an example chart. Spotify pays 85% of net income from streaming royalties per stream per account.
If you go to the Spotify dashboard you will see a column for total revenue. This is the sum of all sales. Spotify pays out 85% of the net income from streaming royalties to its artist partners directly.
For example, if an artist has 3 million downloads on Spotify, every download equals $10 worth of revenue for Spotify. So if an artist earns a royalty for a single Spotify download (which would be a $10 payout), then that is the total revenue from Spotify as an artist.
On the same charts, you can see