Comment by deng

Erm... things are a bit more complicated than you make them out to be and I'm afraid you do not really know a lot about how all of this works (me neither, btw, this is all very, very messy). It is correct that Spotify pays artists through distributors (and they partly own one, Distrokid, but that's another story) or labels. But there are usually also royalties that need to be paid for songwriting, lyrics and performance, which can (and often do) go to different people. This is extremely complicated and different from country to country, but completely separate from the distributor. The artist/lyricist/performer will receive these royalties (if they registered for it) from entirely different institutions. This is the prime advantage of "royalty-free" music - you need to pay only the artist (or their representation like distributor/label), either flat or per stream/performance/whatever... So in summary: yes, Spotify most definitely saves a ton of money with steering people towards this kind of stuff. I also wouldn't be surprised at all if they actually just pay flat fees for that junk.