Spotify just announced some big news for artists – and their bank accounts.
Three ways you can make money through Spotify 1. The regular ‘ole payment for the stream — Some people call this a “master use royalty.” Others call it the “artist royalty.” Technically, it’s the payment for streaming your licensed sound recording.
The streaming platform has long enabled artists to highlight a piece of music on their profile via the ‘Artist’s Pick’ headline.
Now, Spotify has launched a sister version of this feature, ‘Artist Fundraising Pick’, which allows acts to pin a specific destination on their profile where fan can pay them ‘tips’.
Artists wishing to use their Fundraising Pick to encourage their fans to pay money to good causes are welcome to do so – either via GoFundMe, or direct to a range of causes supported by Spotify’s COVID-19 Music Relief project.
However, artists wishing to use Fundraising Pick to encourage their fans to pay them money, can also do so – via a link to one of two endorsed e-wallet services, PayPal.me and Cash App.
The timing of the launch of ‘Artist Fundraising Pick’ is obviously apt, amid a global pandemic that has wiped away any hope of live touring income for artists, while also hurting physical music sales and licensing revenues.
Said Spotify in a blog post today: “Given the urgency and impact of the COVID-19 crisis, we’re working as quickly as we can to develop this new product and get it out to as many artists as possible. However, we’ve never built a fundraising feature like this before. We consider this a first version that will evolve as we learn how to make it as helpful as possible for the music community.”
Time will tell how committed Spotify is to the long-term idea of fans being able to ‘tip’ artists money directly on its platform, or whether these features will be retired after (fingers crossed, everyone!) the COVID-19 pandemic dissipates.
Online fan ‘tipping’ has become commonplace on platforms such as Twitch (via the platform’s ‘Cheering’ feature), and has also become a key tenet of Tencent Music Entertainment’s business in China.
“Given the urgency and impact of the COVID-19 crisis, we’re working as quickly as we can to develop this new product and get it out to as many artists as possible.”
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YouTube launched a ‘Fan funding’ virtual tip jar feature for creators in 2014, but later retired it. In 2017, YouTube essentially replaced this tip jar with ‘Super Chat’, which enables fans to pay to have their live chat messages highlighted; creators earn a share of this money.
One of Spotify’s new partners, Cash App, has pledged a $1m fund for artists in the US and UK on the service as part of today’s announcement, which has the double benefit of helping acts during a difficult time… while also monetarily incentivising them to use Cash App rather than PayPal.me.
How that fund works: Spotify for Artists users that submit their “$cashtag” username as their Artist Fundraising Pick — and secure at least one monetary contribution through Spotify — will receive an extra $100 in their account from Cash App, until a collective total of $1 million has been contributed.
According to Spotify, artists from all over the world and at various stages of their careers have helped launch the Artist Fundraising Pick.
Tyrese Pope is fundraising through Cash App.
He said: “I’ve been using Cash App to raise money for a while but now that listeners can contribute through Spotify, it’s going to make a big difference. With touring now impossible, it’s never been harder for artists to make ends meet, so the extra contributions from Cash App and listeners alike will really help when we need it most.”
Boy Scouts (aka Taylor Vick) is also fundraising through Cash App.
She commented: “Like so many others right now, I am out of work as our tours have been cancelled or postponed because of COVID-19. Any help is appreciated as we keep in our efforts to find new ways to get by.”
“I’ve been using Cash App to raise money for a while but now that listeners can contribute through Spotify, it’s going to make a big difference.”
Tyrese Pope
Benjamin Ingrosso is fundraising for Musikerforbundet.
“I want to be helpful in the ways I can during these difficult times,” said Ingrosso. “I’ve seen lots of my fellow musicians lose work due to the current situation. Most of us don’t know when we will be able to go back to work.
“Music is something that always helps us in rough times like these as well as being there with us to celebrate all the happy moments. I’m hoping that this fundraising for Musikerförbundet can help us get through this and get us back up on the stage, when all of this is over, to bring happiness to people with live music again.”
Marshmello is fundraising for MusiCares: “So many of us have been affected by the COVID-19 virus, and now more than ever we need to stand together and help each other.
“MusiCares is helping all working musicians, producers, songwriters, engineers and so many. Let’s all do our part to help those who need it most!”
Spotify said: “This is an incredibly difficult time for many Spotify users and people around the world — and there are many worthy causes to support at this time.
“With this feature, we simply hope to enable those who have the interest and means to support artists in this time of great need, and to create another opportunity for our COVID-19 Music Relief partners to find the financial support they need to continue working in music and lift our industry.”
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Spotify for Artists admin users can select Get started on the banner at the top of their dashboard to submit their Fundraising Pick.Music Business Worldwide
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Exactly how much streaming services pay out to musicians in royalties has always been a hot topic. In truth, there's no simple answer, but we'll try to explain how much your music could be earning in streaming royalties from platforms like Spotify, Apple Music and more as well as the different factors that affect royalty payments.
How much do music streaming services pay musicians?
Music streaming services like Spotify, Apple Music, Deezer, Tidal and Amazon don’t have a fixed “pay-per-stream” rate when it comes to paying out music royalties to artists.
There are lots of factors that affect how much money one stream is worth in royalties. The main factors include:
- The listener's country and location
- Whether the listener has a paid subscription or free account
- The specific artist’s royalty rate
- The relative pricing & currency in different regions
This makes things complicated when trying to predict what you'll earn in streaming royalties. It's just about impossible to accurately calculate exactly how much you’ll make from a certain number of streams, as all these factors need to be into account.
However…
A recent study based on information collected from real musicians and third-party websites provides a general look at the estimated royalties currently being paid out to artists in the USA by the world’s biggest music streaming platforms.
Using this data, we’ve created a Music Streaming Royalties Calculator.
Just choose a music platform, enter your predicted streams and check out the estimated royalties total in US dollars.
IMPORTANT: THE ESTIMATED ROYALTIES PREDICTED BY THIS CALCULATOR WILL NOT BE 100% ACCURATE. MANY FACTORS AFFECT STREAMING ROYALTIES AND THIS SHOULD ONLY BE USED AS A GUIDE.
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Of course, the royalty figure you get here won’t be an exact match to your real-life royalty statements due to the unpredictable nature of streaming payouts. But it does offer a nice ball-park figure to help you understand how much your streams are generally worth.
As you can see, some music services pay out more than others. But keep in mind that some platforms with lower royalty rates may have more users and a wider reach. So a stream from certain platforms might actually be worth more in terms of reach, exposure and building your profile.
If you’re interested, here are the estimated “per-stream” figures our calculator is based on.
Napster
$0.019 per stream
Tidal
$0.01284 per stream
Apple Music
$0.00783 per stream
Google Play Music
$0.00676 per stream
Deezer
$0.0064 per stream
Spotify
$0.00437 per stream
Amazon
$0.00402 per stream
Pandora
$0.00133 per stream
YouTube
$0.0.00069 per view
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While these numbers might give a vague idea of music streaming royalties in the United States, it’s important not to think about streaming services solely as money-making platforms.
As you can see from our calculator, it takes a lot of streams to start earning the big bucks - not that it's not possible! There are loads of independent artists out there doing huge streaming numbers and making a good living solely through streaming royalties.
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However, when you release music on Spotify, Apple Music and other streaming platforms, they offer a direct route to new and current fans. Exposure like this is a stepping stone to success.
Do you have any questions about music streaming royalties? How closely does our estimated music streaming royalty calculator reflect what you earn from streaming services?
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We’d love to know! Let us know in the comments and below and share this with your fellow musicians.