According to the most up to date information reported by Spotify in 2020, Spotify pays anywhere between $0.006 to $0.0084 per play to the right holder of the song. So ideally, 1000 streams can earn royalties between $6 to $8.4.
However, the money is not directly transferred to the artist’s account. Spotify usually sends the money to the record company first, and then the company will distribute it with the people who are related to the song. For example, song managers, artists, marketers, etc. So the money in the hands of the artist is actually less than $6-$8.4.
If you get a lower royalties, following factors that affect the streams may help you:
- subscription type (free/paid)
You get paid whether or not a song is played by a premium subscription user, or a free user. The difference is where the money comes from.
When an artist gets paid from a premium play, they’re getting paid out of the total bucket of money that they’ve collected from all of our premium users. When they get paid from a free play, they’re getting paid from bucket of money that comes from all of their advertising. You can click here to know more about the differences between Spotify paid and free account.
- subscription price
One of the most important factors that affect your royalties is the subscription price. A good example is:
In India, a Spotify premium user only has to pay $1.60 per month, while in Denmark, a premium subscription costs the equivalent of $15.66.
- Spotify withholding fees
Spotify keeps 30% of all revenues generated. Of the remaining 70%, a part is paid for the songwriters and composers and the rest goes via label or distribution to the rights holders of the song.