James Blunt is the latest artist to publish details of how much he earns from streams of his music, telling his Twitter followers that he earns less than £0.0005 per stream on Spotify.
“I get paid £00.0004499368 per stream. Beers are on me! Cheers @Spotify,” tweeted Blunt last weekend. And like other cases of artists announcing their streaming earnings, it’s left us with plenty of questions.
Start by converting Blunt’s figure into dollars: he’s getting $0.0006968992 per stream. Yet Spotify’s public figures claim that the average per-stream payout to labels and publishers on its service is between $0.006 and $0.0084.
If both sets of figures are correct, that means Blunt is receiving between 8.3% and 11.6% of the money that Spotify is paying out for streams of his music, with between 88.4% and 91.7% going to his rightsholders.
That’s a very big ‘if’ in the last paragraph, though. First, we don’t know which royalties Blunt is referring to: are they for his work as a performer, as a songwriter or both? Are they definitely all for Spotify rather than other streaming services – Pandora and YouTube, for example?
According to Spotify’s public stats, Blunt currently has just under 3.4m monthly listeners on the service. Even if they each played only one of his tracks, that would mean 3.4m streams a month – $2,369 at the rate published by Blunt representing his earnings as a creator, and between $20.4k and $28.6k paid out to rightsholders on his behalf at the average rate published by Spotify.
That’s a minimum, remember, but it shows the gulf between the two sets of figures.
There are questions for Spotify too, though. The company published that $0.006-$0.0084 average per-stream payout figure in December 2013 when it launched its Spotify Artists website and analytics for musicians. Is that still the average, or has it been falling? This recent article on The Trichordist claimed the latter, with compelling data.
Here are more workings on that: In 2013, Spotify’s cost of revenues – a figure that includes royalties but also distribution costs – was €616.4m according to its financial report. The company ended the year with 36m active users including 8m paying subscribers. In 2014, its cost of revenues was €882.5m, while the company ended the year with 60m active users including 15m paying subscribers.
So, between 2013 and 2014, Spotify’s active users increased by 66.7%, while its costs (including royalties) increased by 43.2%. With the company dividing a fixed percentage of its revenues (around 70%) between rightsholders, it would be extremely surprising if its average per-stream payout hadn’t fallen since the end of 2013.
It’s these kinds of questions that you have to ask whenever an artist takes the (welcome) step of publishing details of their streaming royalties. Blunt’s claim follows a similar tweet by La Roux, who said she’d earned £100 from Spotify for an entire quarter’s worth of streams.
On the artist’s end of the royalties process, it’s important to understand exactly what these payments do and do not cover. But for streaming services, it’s key to understand how their payouts to rightsholders are changing over time. Music Ally has contacted both James Blunt (via Twitter, naturally) and Spotify to see if we can get more clarity on this particular case.