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Spotify

Picture Credits: Spotify

 

Over 24 million global users make Spotify one of the leading music streaming services. Quite impressive numbers, huh? It’s very likely, that, among those 24 million, there are people who don’t know your music but would probably love it. This article is an easy-to-use guide to help you getting your music on Spotify and potentially make new fans around the world.

Since launching its service in 2008, and after some initial struggles, Spotify has been growing in popularity and has now become one of the biggest names in music streaming. Of the 24 million (ca.) people who use the service, about 18 million use the Spotify’s free version, while the remaining 6 million are Spotify premium users – who pay a 9.99$, 9.99€ or 9.99£ subscription fee each month.

Simple signup process:

1. Signup to Spotify using your email or Facebook details

2. Choose between the Free or Premium Version (the free version allows you to create playlists and listen to music on your computer, smartphone and tablet; and it contains ads. Spotify premium, on the other hand, comes in free of ads. In addition to what is offered to Spotify free users, those using Spotify premium can also listen to music on television, can download music and listen to it offline. It costs 9.99€, 9.99$ or 9.99£ depending where you are registering from)

3. Download Spotify and install it on your computer

4. If you have a smartphone and tablet you can also download the free Spotify app (available on iTunes and Google Play)

5. Start enjoy your favourite tunes or discover new music

Spotify for Musicians: Get Your Music to Million of Users

A screenshot of a Spotify artist page

You can get your music on Spotify whether you are signed with a label or not | Picture Credits: www.spotifyartists.com

 

The first thing you should know as an artist is that all the music on Spotify is delivered by labels and distributors. In order to ensure that all the music is fully licensed and to prevent illegal or unlicensed music from being uploaded by third parties, nobody else can upload music. Yes, that includes you. But have no fear…you can get your music on Spotify whether you have a label or not. Here are two scenarios:

a) If you already have a deal with a label or distributor:

Since Spotify has deals with a wide variety of labels, digital distributors and aggregators around the world, it is likely that your label or distributor is already familiar with the service. If so, all you need to do to get your music on Spotify is to simply ask your label or distributor to make your music available on Spotify. Keep in mind that if you have only recently signed to them, it may take a few weeks for your tunes to be delivered to Spotify.

b) If you DON’T have a deal with a label or distributor:

You can get your music on Spotify even if you are not signed to a label. In fact, the music streaming service has deals in place with several companies that can deliver your music for you. These will handle the licensing and distribution of your music and will also administer the royalty payments that you generate from your streams on Spotify. Usually, there is a small fee or percentage cut involved in using these services. A list of aggregators that have an established relationship with Spotify can be found here.  

Spotify also has Spotify Artists, its own webpages that features FAQs and other information  on Spotify for musicians.

How Does Spotify Pay Royalties?

Spotify pays royalties for all the listings that occur on the services by using a 30%-70% (quick note: here Spotify specifies that the 70% should be understood as “nearly 70%) formula. The 70% is split amongst the right holders (labels, publishers, distributors and, through certain digital distributors, independent artists themselves), which then divide the royalties and accounts to each artists, depending on the individual deal. The remaining 30% is retained by Spotify. The graph below shows the royalty formula used by Spotify:

Spotify chart

The royalty “formula” used by Spotify | Pictue Credits: www.spotifyartists.com

 

Below are more details on the terms that are featured in the royalty “formula”:

– Spotify monthly revenue: the total revenue Spotify makes from advertising and subscriptions in a given month. (Note: this varies from country to country depending on a range of factors including how many users Spotify has in that country, how many of them are premium subscribers and how much advertising Spotify sells in that country).

– Artist’s Spotify streams divided by total Spotify streams: this calculates an artist’s popularity on the service, their “market share.” Dividing an artist’s streams by the total streams on Spotify determines the percentage of Spotify’s total pay-outs that should be paid for that artist’s rights.

Royalties paid to master and publishing owners: Spotify negotiates its royalty economics with labels and publishers in each territory where it operates. Spotify’s current payment agreements lead it to distribute approximately 70% of its gross revenues to master recording and publishing rights (both mechanical reproduction and performance) holders. The precise division between these types of rights holders varies by territory in accordance with local laws and negotiated agreements. In the United States, for example, statutes dictate that publishers receive ~21% the amount that master recording owners receive.

– Artist’s royalty rate: once Spotify has paid a rights owner the total royalties due for their accumulated streams, that label or publisher pays each artist according to that artist’s contractual royalty rates. This will likely also take into account other factors including recoupment status, which is one reason that different artists in different deals might ultimately receive different royalties from their respective labels and publishers. Independent artists can retain up to 100% of their royalty payouts from Spotify by using one of its aggregator partners (a small fee may apply)

Artist pay out: the end royalty paid out to the artist after the rights holder royalty split and any other deductions have been applied.

Conclusion: Why You Should Get Your Music on Spotify Today

Some have criticized Spotify for its low handouts. In Why Musicians Must Embrace Spotify and Pandora Forbes’ Steve Bertoni cites an article on Spotify analytics that was published by the Guardian last December. Talking about royalties, Bertoni writes: “Spotify hands out “$0.006 and $0.0084″each time a song is played (that money goes to the rights holders, who takes a cut before the artist is paid)”. While Spotify can lead to revenue generation, monetization on the music sharing service shouldn’t be the main reason why you take your music on Spotify. The keyword here is EXPOSURE.

As Bertoni wrote, traditional radio is becoming more monotonous and conservative: “A story by Hannah Karp in the Wall Street Journal, shows that traditional radio stations are playing ‘less variety than ever’. Radio programmers believe people will stay tuned to the station if it’s playing a song they recognize. Karp provided the numbers to show just how repetitive the stations have grown.

Some may argue this opinion, but that’s not really the point here. What’s important for you to know, as a musician, is that there is a series of services (most of the time free to use) that you can use to gain exposure and take your music to fans around the world. Spotify alone has about 24 million users. Those are impressive numbers. Just think about the number of new followers you can get by using services like Spotify, Soundcloud, Songkick and last.fm!

What’s your take on this one? Do you think Spotify is a good/bad service? Why? If this article was useful to you and you know someone who could benefit from it, feel free to share it!