In an effort to prove its worth to skeptical musicians, Spotify has released a new Spotify Artists page including a description of how its business model works as well as its analytics. Artists can now view data for their streams of music including projected figures of how much they can expect to earn as the popular online streaming service grows.
Mark Williamson, the director of artist services at Spotify explains their motivation for the new site. “The position we take is look, we know Spotify is not perfect for all artists yet, but this is the theory behind it, this is where we are, and this is where we are going.”
Spotify pays out about 70% of its revenue to the rightholders. On average, Spotify this comes out to between $0.006 and $0.0084 per stream, but this small amount is then split between artists, labels, publishers, and collecting societies.
Spotify wants artists to think of payouts in total instead of on a per-stream basis. Using numbers from July 2013, it estimates a month’s stream of five different albums from $3,300 for a “niche indie album” to $425,000 for a “global hit album.”
When Spotify hits the 40 million paid subscribers mark as it hopes to, that same “niche indie album” is set to generate $17,000 per month with the “global hit album” making over $2 million.