Tuesday, December 03, 2013

SPOTIFY spills the beans:

Spotify on Tuesday unleashed a load of data, revealing that each time a user pays for a song, rights holders are paid between $0.006 and $0.0084. Over the course of 2013, the company says it will have paid $500 million in royalties, representing half of the $1 billion Spotify sent to rights holders since setting up shop in 2008.

[…] Spotify has been a lead player in the growth of streaming music, with revenue more than doubling in 2012 to $590 million and its user base growing well in excess of 24 million, at least 6 million of which are paying clients.

[…] Last year, the Brooklyn band Grizzly Bear complained on Twitter that they received on $10 for 10,000 plays of their tracks. The math Spotify published suggests the total pay-out for a track over 10,000 plays is actually between $60 and $84.

[…] Spotify’s new data suggests there is money for hit makers. The company says, for instance, an unnamed “global hit” album generated $425,000 in revenue from Spotify during the month of July, while a Top 10 album generated $145,000.

Spotify pointed to an unnamed “global star” to which it paid $3 million in individual royalties over the past year, a sum it expects to double in 2014. It added that this particular artist wasn’t its most played artist and that there other stars were paid more than $3 million in 2013.

[…] When the whole group of paid and unpaid clients is tallied up, Spotify says it generates an average of $41 per user, higher than the $25 that Spotify says the average U.S. adult pays for music in a given year.

As Spotify has grown, it has taken on an increasing amount of red ink. Last year, the company lost nearly $80 million. About 70% of the money taken in, Spotify says, goes right out the back door in the form of a payment to rights holders.

[…] Spotify said its own service offers better returns to right holders compared to alternative digital music services. One million listens on Spotify generates between $6,000 and $8,400, which compares to about $3,000 on video streaming such as Google Inc.’s YouTube and between $1,300 and $1,500 on radio streaming services like that offered by Pandora Media Inc.