Lately it seems like Spotify is on top of the music game with fresh new licensing deals with labels, a $5 billion increase in valuation and plans to go public within a year. But a new report by a royalty organization says artist and label payments are declining, despite large growth in subscriber and advertising revenue.
The streaming music company has yet to turn a profit even though revenues are rising. A new report from royalty organization Audiam also shows that per-stream revenues paid out to labels, publishers and artists are also being cut. Two years ago they released a report stating similar findings – as revenue went up, streaming payouts remained low.
A brand new report has shown that nothing has changed in the two years since the first report. The numbers used in the reports are not Audiam’s – they are from the US Copyright Office.
Digital Music News reports:
In December 2016, to earn $100 from ad-supported streams, a song would need be played 448,672 times. Spotify paid out $0.00022288. Yet, just one month later, the number dropped down to $0.00013508. To earn $100 from ad-supporter streams, a song would have to be played 740,302 times. Note that this didn’t apply to premium streams.
Spotify has, over the last couple of years, defended the numbers by stating that overall streaming payments have actually increased. Also, Spotify says it pays out over 69% of revenue. Some say, in that case, the labels are to blame.