There has been a bunch of controversy over how much artist receive in royalties on the music streaming site Spotify. Before researching I thought that artist received a certain amount of money per play but this is not the exactly case. According to the Spotify website, they divide the artist streams by the total streams Spotify receives to determine the percentage the rights holder should get paid. (Which is usually 70%). The royalties specifically go to the writers and producers of the song. After they are paid, the record label or writer pay the artist based on the royalty rate that is in the artist’s contract. As for independent artist, they receive 100% of their royalty payouts. In other words, Spotify has no control over the percentage signed artist get from the royalties made on their site.
Spotify has claimed that they have paid $1 billion dollars in royalties to date. In 2013 specifically, they have paid rights owners $500 million. This shocked me because I did not think Spotify was making that much money. Spotify uses the money they make off their subscriptions and advertisements to pay off royalties.
So we can’t really blame Spotify if an artist doesn’t get that much money off of them. It really is based on popularity and their contract. The more streams the artists generate, the more money they will receive.