Streaming revenue calculator
Introducing our artists earnings from streaming calculator
This question has sparked countless debates since streaming platforms revolutionized the music industry. In the early days, several artists voiced concerns about low streaming revenues, cementing a perception that persists even today.
But let’s cut through the noise with something undeniable: numbers. To provide clarity, we’ve developed a tool that calculates an artist’s streaming royalties as accurately as possible. It factors in streams across audio platforms and market-specific pay-per-stream rates to estimate the revenue generated by an artist’s catalog.
Now, let’s play with the calculator! Just remember, this topic has many nuances, so be sure to check out the detailed explanations that follow.
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The tool reflects earnings from all audio streaming platforms. The calculation is updated daily with a 48-hours delay on data.
How streaming platforms pay royalties
Streaming platforms’ economic model
Streaming platforms like Spotify and Apple Music retain 30% of the revenue from their subscribers, with the remaining 70% paid to the music industry. This split mirrors the previous model used by iTunes and is comparable to the share that retailers historically kept when selling physical records. By contrast, theaters often keep 40-50% of movie ticket revenues due to the higher costs of operating their facilities.
Spotify, the largest player in music streaming, paid $9 billion to the music industry in 2023. This figure is poised to surpass $10 billion in 2024, thanks to a 20.08% year-over-year revenue increase by the end of the third quarter.
What is pay per stream, and how is it defined?
Pay per stream represents the royalties paid by streaming platforms for each unique stream. While commonly accepted figures, such as $0.004 per stream on Spotify, are widely cited, they are overly simplistic and incorrect for many cases.
Each platform has multiple pay-per-stream rates because revenue varies by geographical region and subscription plan (e.g., freemium, premium, student, family, bundle). The pay per stream is calculated as follows:
Pay per stream = (group revenue * 70%) / total streams from the group
For example:
- If a group generates $1 million in revenue and streams 100 million tracks, the pay per stream will be $0.007.
- If another group streams the same 100 million tracks but generates only $200,000, their pay per stream will be $0.0014.
For each year, rights owners will typically receive detailed reports showing revenue and stream counts for each group, along with their total earnings.
How much do platforms like Spotify pay rights owners?
The oft-cited $0.004 figure reflects Spotify’s average pay per stream in the U.S. This rate is similar in other similarly healthy countries, even slightly higher in regions like Scandinavia and the UK due to higher subscription prices. However, pay-per-stream rates can be up to five times lower in countries like India or Argentina.
Then, the myth tells that Apple Music pays better than Spotify. That’s a misconception. Apple Music pays nearly identical rates to Spotify as both platforms use the same 70/30 revenue split and have very similar premium pricings in major markets.
The real difference lies in Spotify’s freemium tier. Say an artist has a million US premium listeners on both platforms, they will be paid the same, but there will be an extra half a million freemium users adding a small extra slice on Spotify. These bonus freemium listeners artificially lower the overall average for all users, making it look like the revenue goes down, but it’s untrue.
Say an artist has a million US premium listeners on both platforms, they will be paid the same, but there will be an extra half a million freemium users adding a small extra slice on Spotify.
How much money are artists making?
Do artists collect all royalties?
The royalties paid by Spotify, Apple Music, YouTube music, Amazon Music, etc, go first to rights holders, typically record labels. These labels then distribute earnings among songwriters, composers, producers, and performers according to their contracts. As a result, most singers only receive a fraction of their total income generated.
Historically, most artists earned only 5-10% of royalties, if any, with superstars like Michael Jackson negotiating up to 25% in the 1990s. Record labels retained the lion share to cover costs like production, distribution, and marketing. As streaming requires far less investment than physical products, many artists have renegotiated their contracts to receive a 50-50 split of streaming royalties after expenses.
Independent artists who own their master recordings retain 100% of their royalties, albeit with the responsibility of covering associated costs themselves.
An artist’s earnings can vary significantly across their catalog. A prime example is no other than Taylor Swift. Her 2007 EP The Taylor Swift Holiday Collection was released under Big Machine Records, when she was a new artist likely bound to less favorable terms. The EP features mostly cover songs – meaning that Swift isn’t the songwriter – and now out of print. Realistically, her share from its streams is very small.
Conversely, a modern release like Lover likely grants her a much higher share, given her star status and the industry’s evolved streaming norms. By re-recording her earlier albums to reclaim ownership of her masters, Swift now earns the full royalties from her re-recorded tracks (Taylor’s Versions), distributing payments to collaborators based on their individual contracts.
This shift means her pay per stream varies widely – from negligible amounts for a free user streaming Last Christmas in Nepal to significantly higher rates for a premium user playing This Love (Taylor’s Version) in Iceland, with differences exceeding 500-fold.
Are artists paid poorly from streaming?
To make it simple – no.
When streaming first gained popularity, artists from the physical record era often criticized the payment model, believing their music was undervalued. Three factors contributed to this perception.
- Outdated Contracts: Many artists were still bound by contracts designed for the physical era, with low royalty shares that didn’t reflect streaming’s realities.
- Revenue Timing: Physical sales generated immediate payouts, whereas streaming revenue accumulates gradually over time, akin to a marathon rather than a sprint.
- Misinterpreted Numbers: Early comparisons equated streaming plays to physical sales, ignoring the vastly higher volume of streams. For instance, a million streams were rare in the early 2010s but had become commonplace by 2023, with 1.13 million tracks surpassing this milestone.
Consider an American rock band with five members sharing 10% royalties. In the 1990s, selling 100,000 records at $10 each would yield $20,000 per member. A million streams, initially seen as significant, might yield only $80 per member.
Fast forward to 2024, the streaming pool is now so much bigger that a decently successful legacy band like Incubus got streamed 5 billion times. At $0.003 per stream and a 50-50 split, that’s a $1.5 million revenue per member – equivalent to selling 6 million albums at 10% royalties.
Who can make a living from streaming?
While it is not easy for artists to make a living off streaming royalties, the opportunity is more accessible than ever. Pay per stream varies by country, reflecting local subscription rates and living costs, so the race isn’t the same for all. For example:
- An independent American artist needs 750,000 Spotify streams per month to earn $3,000.
- An independent Nigerian afrobeats artist needs about 2.5 million streams per month to earn $1,000.
- An Indian playback singer with a 25% royalties needs about 5 million streams to earn $1,000.
It appears clear that it doesn’t take Drake-like success to get a decent reward. In fact, Spotify paid over $10,000 in royalties to more than 66,000 artists in 2023 alone. Over half of these were independent artists.
Streaming has democratized music income, making it possible for artists worldwide to earn a living. More than half of these artists earning over $10,000 came from non-English-speaking countries. This shift has particularly benefited musicians from regions historically excluded from the global music market, such as Africa and parts of Asia.
I’ve been checking IFPI reports for decades. On them, it felt that these regions didn’t exist. In the best years, only three African countries were part of their panel (South Africa, Zimbabwe, and Kenya). Asia was limited to 12 countries. The remaining countries had no official music market, no labels, no contracts, nothing. Apart from very modest gigs, playing music wouldn’t bring you a cent.
Today, thousands of artists from these regions are earning real money, and the potential for growth remains enormous.
While breaking into the music industry is still challenging, streaming has opened doors for more artists to succeed globally. It’s a demanding journey requiring hard work and persistence, but it is achievable.