Spotify per stream payments are going up
Spotify’s new 1,000 stream per year rule demonetizes 60% of songs, redistributing payouts to higher-performing tracks. Combined with recent price increases, this should raise the average payment per stream by about 6-7%.
By Andrew Southworth
Hey friends!
Today we’re going to talk about how the payment you get per stream on Spotify (should be) going up.
From their new 1,000 stream per year per song requirement for monetization and new price increases, the amount of money artists get paid per stream should be going up. In this post we’re going to talk about why that is.
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1,000 stream rule
As of April 1st, 2024 Spotify new 1,000 stream rule went into effect. This means that 60% of the songs on Spotify are now demonetized. But it also means that the money those songs would have made is being redistributed to artists that did hit the 1,000 stream requirement.
On the same day, their rules against ‘noise music’ went into effect as well. Effectively demonetizing these rain sounds, white noise and non-music content. All of this money goes back to the artists that hit the 1,000 stream requirement - so more money per stream.
Spotify price increases
A new report says that Spotify is raising the price of their premium plan by $1 per month, after they already raised it last year. Additionally, Spotify is reportedly launching a ‘basic’ tier that does not include audiobooks, at the current price of $11/mo.
The reason this matters is that Spotify pays out roughly 70% of their revenue to artists and labels. When the price goes up the payment per stream should also go up. Furthermore, them breaking the audiobooks into a separate tier might help prevent audiobooks from pulling money from music (not sure how they pay authors for audiobooks).
Okay, how much?
That’s the part nobody is entirely sure of. At least for their new monetization policies Spotify estimates it will add $1 billion in payouts to artists over the next 5 years - so $200 million per year.
Considering last year they paid out $9 billion in stream payments, that only represents about a 2.2% pay increase per stream.
However we also have this price increase by about 9% ($11 to $12 per month). Some people may downgrade to the new basic tier at the same price, but I have a feeling most won’t. If we assume half of them keep the higher price that means we can assume a 4.5% increase averaged out.
In total this means we might see an increased pay per stream of about 6-7%.
Is it enough? In my opinion, no. I’d like to see them try and double their per stream payout to get more in line with Apple Music and Amazon Music. But getting a 6% raise in a year is often better than what most get in corporate jobs.
It’s totally possible i’m missing something or made a math error somewhere, but these are my quick back-of-the-napkin calculations.
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