Why Do Streaming Services Give More Royalties?

In addition, with all the success streaming services have they continue to give artists low royalties and artists want justice by increasing the pay rate of royalties. I will compare Spotify, Pandora and Apple the three biggest streaming services and see which streaming services give more royalties. Next, I will demonstrate how the royalties are split between the artist and record label. The website Information is Beauty provides a data chart containing each streaming services’ royalties, users and much more. According to Information is Beauty (2018) Spotify pays an artist $0.0044 per stream and it takes 366k plays for the artist to earn the minimum wage ($1,472), Pandora pays an artist $0.0013 per stream and it takes 1.1 million streams for

This makes Napster the best streaming service giving high royalties to artists than any other services. Although Spotify is the most successful streaming service between any other streaming service it has over 159 million active users. Artists have mainly had issues with Spotify because they are the ones with the most active users but are the second least streaming service that gives artists low royalties This is the reason why there are conflicts between the two. Artists have advocated for Spotify to give higher royalties but Spotify doesn’t pay much attention to the artist. The way I see this is Spotify won’t change its policy because consumers will continue to use their service even if they pay artist low or high royalties. Until Spotify sees its losing users because users feel that artists need higher royalties then at that point Spotify will raise the royalties. As of now, it seems Spotify won’t be changing its policy anytime soon each month the streaming service expands its number of users. Now with the help of Manatt I will demonstrate how the royalties are split between the artist and the record

They take up about 55% of the whole money made from the streams. 29% of the money made stays with the streaming service and artists only get 16% of the royalties. Though each streaming services varies on how the royalties are split I’m just going by how an estimated amount is split on Spotify. The minimum wage an artist gets from Spotify is $1,472 with 336k streams. Let’s do the math if the record label gets 55% of the money made from streams they get up to $810, 29% of the money stays with Spotify which is around $427 and artists only get rough 16% of the money which is around $235. As you can see the artist receives the least money and they are the ones who are making the album. Artists generate money for record labels and streaming services when those two have nothing to do with the album’s process. The label does provide artists money but the artist is the one making the album which they have invested so much of their time to only receive less