Where your Spotify $9.99 goes
Jul 11, 2023
tldr: Independent artists are left with 10–20%, often paid 3–6 months late.
tldr: Independent artists are left with 10–20%, often paid 3–6 months late.
We spent the last year investigating the profit and losses of modern musicians on top streaming services. Here’s what we turned up.
On average, streaming platforms take 33% of your subscription payment as revenue. They pay another 38% to labels. Those labels retain some or all of that money to cover their own expenses, depending on the nature of the recording agreement with each managed artist.
Independent artists are left with 10–20%, often paid 3–6 months late. We found the average ~ 17% with variations due to PRO expenses, manager/agent fees, touring costs, merch, distributor fees and untracked pool payments. It may also be higher if you manage more of your business or don’t incur songwriter splits.
Data is sourced from direct artists interviews, research firm MIDiA and Goldman Sachs. This is an average and actual payment flows are difficult to estimate due to the complexity and variation of deal terms, technology solutions and international copyright law.
We believe the modern music industry is a metaphor for the larger economic forces which dominate our time: tournament economics, monopoly lockout, rent-seeking and rapid digital disruption. We, like many, are advocates for a rethinking of the music industry, favoring broader artist rights, digital innovation, less regulation and direct artist payments. To build for this future, it’s time to break away from the past.