Matthieu Picard shares a comprehensive breakdown on the numbers of revenue created and costs incurred in music streaming and creation.
Many of us have the inkling that each time we listen to our latest obsession on Spotify, that act generates some infinitesimal amount of revenue for the creators of the music… but for those who are curious to geek out on a fuller picture here is a breakdown of the niche economics of music streaming and creation.
This overview is based primarily on my dabbling as a dance music producer over the last four years and triangulated through other artists/music industry people and public research. While well intentioned, there is a roughly 100% chance I will be missing things and some numbers will be more off-ish than others. Hopefully you pick up a nugget and maybe smirk one or twice nonetheless.
The sections are: top-line revenue, costs & players across the music creation ‘value chain’ (there are a lot!), equity ownership (labels!) and economic analysis (artist profitability, moats and motivators).
Three practical notes: (1) while most full-time artists rely on income from live shows, merchandise and other areas, the focus here is on streaming. (2) Spotify is used for most examples instead of Apple Music as it is the leading platform (and also probably for convenience as I am a Spotify user). (3) There will be run-on sentences and probably too many parentheticals.
Top Line Revenue:
Generally speaking, each stream (30+ seconds of listening) on Spotify yields ~$0.003 to $0.004… so 1,000 streams is ~$3-4. This rate most depends on whether a listener has Spotify premium or not and which country they are listening in.
Key points include:
- Direct production costs: recording, other artists and outsourced production
- Artist and track level profitability
- Distribution and marketing
Read the article, The Niche Economics of Music Streaming and Creation, on LinkedIn.