In today’s digital world it’s rare to find individuals who purchase physical records so they can enjoy their favorite artist. As a result, you also see fewer and fewer people purchase entire albums from an artist, be it a physical or even digital copy. This largely has to do with the rise of music streaming services which offer the ability to listen to practically whatever music you want in a much more cost-effective manner than purchasing records. However, it’s no secret that these streaming platforms offer extremely poor compensation for their artists that often equates to fractions of a penny.

According to Spotify, in 2020, over 1.2 million artists on their platform had over 1,000 monthly listeners. They have clearly established themselves as a premier music streaming platform with over 172 million premium subscribers. Even with this large platform, they still only pay artists on average $0.004 per stream. So, it’s easy to do the math and realize an artist would have to earn 250,000 streams just to make $1000 dollars. Additionally, this money is further divided among record labels or managers so at the end of the day the artists rarely see an amount anywhere near this $1000.

At the same time, it’s not entirely Spotify’s fault for the low compensation they give to artists. Obviously, they are the ones who determine the pay structure but they have to do so from a business standpoint to support themselves and the 172 million person user base they have acquired. If they were to offer higher compensations to artists, they would inevitably have to raise their subscription fees whereupon people would likely cancel their subscription for a cheaper alternative such as Apple or Amazon music.

At the end of the day, the music streaming platforms are not entirely to blame. It’s also the consumers. If people really wanted to support the music artists they love they would start buying records, be it physical or digital. Of course, there are licensing and royalty fees associated with this process also, but overall, musicians receive a much larger percentage of the actual sale. While streaming platforms can determine the payment structure, it’s up to the listeners to truly value an artist’s work.

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Ben Soto

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