How To Make Money From Spotify? [10% Royalties Fair Enough?!]
Welcome to my "How to Make Money from Spotify" Post!
You might be wondering how is it possible to make money using Spotify as your platform. Obviously, this post isn’t for everyone except those who excel in creating music, is it?
In my previous post, I wrote about how can you make money by listening to music in various ways either as a music curator or as a reviewer to different surveying companies out there.
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Today, we’ll delve into this kind of opportunity as a music creator. How could you, a musician, can make money through Spotify? Is it really possible to earn an income online from this industry? That’s what we have to find out.
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Let's dive into the post. Shall we?
Spotify Review - Quick Summary
Founders: Daniel Ek & Martin Lorentzon
Type: Media & Audio Streaming Platform
Price: Free to $14.99/month (depending on the plan)
Best for: People who are interested in creating music and spread it across different audiences across the world.
Summary: Established in Stockholm, Sweden, Daniel Ek and Martin Lorentzon, both the pioneers of the massive streaming platform, achieved success with over 20 million songs with a countless number of artists - both independent and with record label.
Is Spotify Recommended? Yes, if you are a competitive musician, you can. Otherwise, you have to check Roope's #1 suggestion. Click the green button below to check it out.
What Is Spotify?
In my previous post, you learn about how to make money online listening to music. With that having said, you realized the pros and cons. Granted, you weigh in your decision based on how others' experiences on several platforms.
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Today, we're going not only determining the pros and cons of earning money through Spotify, but we also like to discover how it is possible for everyone to utilize it for our sake financially.
Before anything else, let's learn about Spotify.
Established in Sweden, Spotify Technology S.A., simply known as Spotify, Daniel Ek and Martin Lorentzon founded the media services company in 2006.
Its primary mission is to provide an audio streamline for both music and podcasts for media companies and record labels.
To date, it branched out to 19 countries with more than 4,000 employees around the world under the leadership of Ek.
On top of that, they moved its offices to 4 World Trade Center while its headquarters remained in Stockholm, Sweden.
How Does Spotify Work?
Spotify provides options for you as an indie artist or as someone in a record label. The payouts came from the subscriptions from billions of users across the globe, ranging from Free to $14.99 for Family Premium Plan.
Just so you know, the platform is available in almost all continents. Imagine the money running here. Lots of money.
Based on how the executives explain it in layman’s term (in a simplified version), as an artist you have to understand that your revenue or royalties come from the streaming share.
That means you own 10% of the revenue in accord to the stream shares in which your song is played in a user’s playlist.
The more often your song is played, the higher stream share you get. Hence, you have to create a great song to entice more listeners.
Also, that also depends if you are an independent artist or someone from a record label. As I mentioned earlier, Spotify varies its payment options depending on your decision as an indie artist or the circumstances between them and the aggregator (the record company).
How to Make Money with Spotify?
To make money on Spotify, it doesn’t follow the system as Playlist Push at all. You have to know basically where your money comes from.
And that is through the number of streams your song gets. I mentioned earlier you get 10% of the share based on the streams.
That also depends on your circumstances whether you are an independent artist or with a record label working with you.
The terms and conditions upon payment vary on how the agreement goes between you, your aggregator, and Spotify per se.
Spotify [UGLY] Truths Revealed!
1. Highly Competitive
Simply because Spotify has the most extensive media streaming, it is evident that the artist could struggle to compete against hundreds of thousands of artists in a particular genre of music.
In total, there are 20 million songs, including audiobooks, comedy, radio dramas, podcasts, poetry, and speeches. According to PCMag, [Spotify] is a highly competitive streaming music space with gains and loses services every few years.
2. Terrible Customer Support
Out of all the rants from dissatisfied customers (non-musician) online, I had to include this concern because this might also affect the artist's status when it comes to communicating the state of his or her music playing across different playlists and audiences.
“If I could give zero stars I would. This company has what can only be classified as the worst customer service department on earth...I emailed Spotify about songs being skipped in [the] queue, Spotify customer service then proceeded to cancel my premium family account and disabled access,” Thomas, one of the dissatisfied users, wrote.
3. Technical Problems For Users
There is a splurge of technical issues for most of its users I've seen on the forums. Notably, the sudden stop of the music in between, although the user has not touched the application nor the device itself.
As a result, it could lead the users to cancel the membership as well as to stop the music playing, affecting the artist's streaming.
4. Hassle With Membership Cancellation
Most of the users on the Better Business Bureau (BBB) have problems with Spotify because of their inability to cancel the monthly subscription after upgrading to a Premium Plan.
Others found out that the company canceled their accounts without notice. Because of that, they left their accounts and promised not to use the “crappy” application again.
“Billing issues seem to be a prevailing theme with this company, and they do not seem to have any improvement. I have had more than one negative experience with their billing practices and encourage others to be cautious. There is a lack of transparency and very difficult to try and communicate with them when there are issues,” a rant from a dissatisfied user named Shannon.
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What I Like About Spotify?
1. Easy Access To Millions Of Music
Both from a record label and from an independent artist, Spotify provided an enormous streaming line for its stakeholders, which plays a vital role in the music industry.
The fact that there are millions of subscribers around the world, in 7 continents, it’s easier for an artist to spread his music to its audiences. On top of that, the application is easy-to-use and is available for mobile devices, PC and/or laptops.
2. Income Opportunities
From the perspective of a musician, having Spotify as a channel made available for streaming purposes is already a great deal.
There might be inevitable problems mainly on the technical side of things, but there’s no doubt it pays out artists worth 10% of the streaming shares. That fact is proof that you can make money with your songs and music, in general.
3. Diverse Options To Payment
Like what was stated earlier, the executives thoroughly explained how Spotify payment works and where does the money come from.
Based on the circumstances between the artist, the aggregator, and Spotify per se, various payment options are depending on the agreement in the parties. Frequently, it follows a direct 10% share for royalties.
4. Easier Music Distribution
From an indie perspective, it’s easier to distribute the music he created to vast audiences across the globe.
There’s no need to spend a lot for CDs or whatever actual means to spread the music or for demo purposes because of Spotify like how it was 10 years ago.
Most newly discovered artists are from these platforms. YouTube is another alternative. But aside from that, Spotify has been the leading option for independent artists to aid them in sharing their music.
Spotify Review - What Others Say?
“Great way to discover new music from playlists,” a satisfied Spotify subscriber from Wisconsin wrote on the forum. It’s true.
Spotify has been one of the most popular options both listeners and music creators and has become part of the culture in the music industry.
Not only in the realm of music, but it also calls the alternative for podcasters to maximize the platform for the sake of spreading their topic or niche across millions of subscribers around the world.
I have been a Spotify Premium user for years, and there have been no reported disappointments on my end so far. Hence, I truly believe that there is a lot of opportunities in the platform in 2 ways.
For a music creator, especially those who are working independently without a record label backing up, it’s making their music creation easier in terms of its distribution and cheaper. It’s obvious.
Spotify provides that substitute for tangible expenses like CDs, pieces of vinyl, among others. They simply create music and upload for curators’ review and add it on playlists with its specific genre. Simple.
At the same time, they earn 10% of the streaming shares while they continue making music. That’s all that it takes.
“Simply put, Spotify is an Editor's Choice-winning streaming music service, whether you're listening on your desktop or a mobile device,” Jeffrey Wilson of PCMag mentioned.
Is Making Money From Spotify A Scam?
Based on the research I did and my personal experience with Spotify, there’s no doubt this is a legitimate platform for music creators and curators to make money and at the same time, enjoy music in various forms.
Not only music, but there are tons of audiobooks and podcasts to binge while we’re on the road. Ek and Lorentzon, founders of the platform, provided the hub for its stakeholders in such a way that it has become part of the culture and definitely changed the game in the music industry.
Regardless, Spotify is not a scam, albeit the inevitable concerns from its dissatisfied users. It’s the best media streaming platform that provides income for independent artists and those with record labels alike.
The downside? Too competitive.
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When it comes to making music, it’s become one of the toughest niches to compete with to the point wherein an artist has to beat hundreds of thousands of fellow artists in the same category. On platforms like Spotify, they’re competing who’s going to get into the playlist.
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Now that I shared my thoughts in my “How to Make Money from Spotify?” post, it’s time to turn the table and ask about your experience, in general.
What kinds of experiences do you have with making money from Spotify? Is it worth your time, money, and effort?
Do you prefer to begin earning your first passive income through affiliate marketing or you instead invest your time, money, and effort to income-generating opportunities like this?
Let me know in the comments below! 🙂
If you need any help to get started making money online, don't hesitate to ask in the comments below and we'll be happy to help you out!