Any controversy around Spotify creates buzz in the whole music market. The same happened with the platform lately, when Neil Young decided to exit the platform completely.
Spotify is the world’s number one music streaming platform. With a market share of 31 percent, the music streamer has surpassed its competitors by a huge margin. So, any controversy around the platform has to create news. Over years, the collaborations of the platform with various artists have made the top position possible for the platform. However, just weeks back, one allegation made against Spotify has shaken the foundation of the platform. He blamed Spotify for not paying the artist the deserving amount as payouts.
What exactly is happening with Spotify?
Spotify is now under microscopic scrutiny as recently Neil Young has urged all the music artists to remove their songs from the Spotify platform. The 76-year-old guy and his colleagues have made a tune in Joe Rogan’s podcast against the Coronavirus-related topic, which is now exclusive to the streamer. A few days back when it questioned the credibility of the platform, it shook people from inside out.
Besides, Rogan’s show is now facing anger from the critic and the listeners for spreading misinformation about the coronavirus. Spotify officials said in this matter, “With an estimated 11 million listeners per episode, JRE, which is hosted exclusively on Spotify, is the world’s largest podcast and has tremendous influence, ”Spotify has a responsibility to mitigate the spread of misinformation on its platform, though the company presently has no misinformation policy.”
Young reportedly wrote that Spotify can have only one between him and Rogan. Withdrawing all the music from the platform simply means that he has to lose 60% of his revenues.
How much an artist earns from Spotify?
Well, Spotify has never officially published its percentage of revenue shared with the artists. It is said that 0.0033-0.0054 USD is given to the streamer per play. This means that a song has to be played by a listener at least three times to earn a penny and to reach a dollar the songs have to be played at least 300 times.
Although not all the streamers face loss in this, many newcomers with not so good number of plays get too little out of the platform. Hence, the low payouts have had harmed many of them. As per the report of 2021 Rich List rapper Drake has earned the most from the platform. He earned approximately 52.5 million USD for 21.5 billion streaming on Spotify.
Likewise, J Balvin reportedly made 37.9 million USD for 15.5 billion streams, Post Malone made 37.5 million USD for 15.3 billion streams, and Ed Sheeran made 36 million USD for approximately 14.8 billion streams on Spotify. The song ‘Shape of You’ alone earned him 6.5 million alone for 2.7 billion streaming.
In 2020, the reports of the Business Insider, the streamers like Spotify have a system called ‘Pro rata’ to determine how much to pay an artist. In the report, they said, “all the money generated from listeners each month is totaled up, then divided proportionally by listening time in order to determine how much each artist on the service should be paid.” A person from Spotify’s licensing department said in a video clip that stream shares determine an artist’s payday.
“For instance, if there are a million eligible streams in a month, and you have 100,000 streams in that month, then your stream share is 10% of the revenue pool or pie.” Darren Schmidt from the streamer’s legal team said. Payday is also based upon the artist’s association with a label or the fact that they have written the song. The artist’s overall participation depends on the amount paid to him.
Investors’ agitation
As Young and Johnny Mitchell are the first artists to officially ditch the world’s biggest music streaming platform, the investors of the platform are scared that he might not be the only one to do so. Even though Spotify has kept itself away from the negative press, the impact on the people and the artists are clear. Any further complication can lead to a big short-term and long-term fall for the investor. Moreover, they are threatened that the backlash can cause people’s search for alternative platforms.
The alternatives to Spotify:
There are several other platforms that get benefitted from the controversial situation in the music market. Hopes are high for these following music platforms.
After Spotify( with 31% hold in the market), there are platforms like –
- Apple Music (15%)
- Amazon Music (13%)
- Tencent Music (13%)
- YouTube Music (8%)
- Net Ease (6%)
- Deezer (2%)
- And others (12%)
The report is made on the market share of each platform by the end of the second quarter of 2021. Nonetheless, if Spotify does not resolve the issues there could be seen a drastic change in the percentages.
Still, Listeners can expect that their favorite platform will resolve the issue as soon as possible and bring some good user experience for them too.