Comment by vintermann
4 days ago
Ad supported streams in Spotify are counted in a separate pool, and only get paid out of the ad revenue pool.
Artists can of course complain that "they're selling our music for cheap!", especially in the ad pool. But what's worth remembering is that when it comes to setting optimal price points, Spotify's interest is almost perfectly aligned with the artists. And Spotify has a hell of a lot more data than artists (not to mention financial sense, which you probably didn't become an artist if you had a lot of).
> Ad supported streams in Spotify are counted in a separate pool, and only get paid out of the ad revenue pool.
What are the rough rates for each pool? That's the important part here. And how many artists are far enough from the average ratio that the detail of two pools matters.
https://soundcamps.com/spotify-royalties-calculator/ This site says $0.00238 is typical for "worldwide" and a lot more than that for US and Europe specifically.
I'd be interested in knowing that too, as far as I know Spotify doesn't publish details to the public at least.
But I have no trouble believing some artists will be vastly overrepresented in the ad financed pool. Also, there are separate pools by country, and countries have different subscription prices - being big in Japan will be more profitable than being big in India.
Payout per stream is a terrible metric. It's almost like if you ranked grocery stores by payment per gram.
> Payout per stream is a terrible metric. It's almost like if you ranked grocery stores by payment per gram.
CDs are usually similar prices. Per-stream isn't nearly as bad as wildly different products sharing prices.
We could debate per stream versus per minute but I don't know if that's a particularly big effect. It causes some annoyance but it's mostly compensated for already.
Anything that gives different value to different artists is probably going to favor the big ones and just make things worse.
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