According to a 2023 report from Music Business Worldwide, Spotify had just over 44 million US subscribers while Apple Music had around 32 million at the same time. With multiple streaming giants currently dominating the music industry, it’s become evident that Spotify is one of the most popular choices for artists and music enthusiasts alike. But exactly how do artists make money on Spotify? This question interests not just music fans but also musicians and aspiring artists looking to harness the platform’s potential. In building a successful music career, part of the process includes considering streaming platforms as a revenue stream. Let’s dive into the mechanics of monetizing music through Spotify to get the full picture.

How Artists Make Money on Spotify: Understanding Spotify’s Revenue Model

Let’s first take a step back and take a look at how the company itself claims its earnings. Spotify’s business model is primarily based on two revenue streams: subscriptions and advertising. The platform offers both a free, ad-supported version and a premium, ad-free subscription service. Revenue generated from these streams is crucial in understanding how artists make money from Spotify.

How Royalties Are Calculated

Spotify pays artists through royalties. Royalties are payments made to creators for the use or exploitation of their intellectual property. In the context of the music industry, royalties are the compensation that musicians, songwriters, and other rights holders receive when their music is used or played. For the most part, royalties are how artists make money on Spotify.

These royalties are based on a streamshare model. Essentially, the total revenue is pooled, and a percentage of it is allocated to all artists based on their share of total streams. This means, the more your music is played, the larger your slice of the pie.

Factors Affecting Royalty Payments

In April 2023, a Daily Mail report revealed that Post Malone earned just north of $4.5 million for his hit single, “Sunflower.” For big artists like Post Malone, Doja Cat, and Olivia Rodrigo, who rack up tens of millions of plays per song, that scale of earnings is typical. 

Several factors influence the amount an artist earns per stream. These include:

  • The listener’s country and subscription type: Payouts vary across different regions and subscription models.
  • Total number of streams: More streams typically mean higher earnings.
  • Agreements with record labels or distributors: Contracts with third parties can affect the final payout to the artist.

How Much Does Spotify Pay in Royalties?

For Spotify, the payment per stream typically falls in the range of $0.003 to $0.005. This translates to a distribution split of approximately 70% for rights holders and 30% for the platform.

How Artists Make Money on Spotify: Practical Tips for Optimizing Revenue

Learning about how artists make money on Spotify is fascinating, but understanding on a deeper level it can be useful to some. If you’re an artist looking to maximize your earnings on Spotify, here are some practical tips:

Building a Strong Spotify Presence

Create and Update Your Spotify Artist Profile

Make sure your artist profile is complete and engaging. An updated profile with high-quality images and a compelling bio can attract more listeners.

  • High-Quality Visuals: Ensure your profile picture and cover art are professional and reflect your artistic brand.
  • Engaging Bio: Craft a bio that tells your story, highlights your achievements, and connects with your audience.
  • Featured Tracks: Select your best tracks to feature at the top of your profile.
  • Regular Updates: Keep your profile fresh with regular updates to reflect new releases or milestones. This is the most obvious yet important way to keep your fans engaged.

Utilize Spotify for Artists

This tool provides valuable insights into your listeners, which can help tailor your marketing and engagement strategies.

  • Access to Analytics: Use the tool to access detailed analytics on your listeners, such as demographics, listening habits, and geographic distribution.
  • Customize Your Profile: Take advantage of features to customize your artist profile, including pinning your favorite playlists or albums.
  • Promote Concerts: Use the platform to list upcoming shows and tours.
  • Direct Communication with Spotify: Submit your tracks directly for playlist consideration and receive updates and tips.

Engaging with Your Audience

Curate Playlists

If you do it right, this can be one of the simplest ways to grow your Spotify account and in turn, increase your earnings. Spend some time creating and sharing playlists that feature your music alongside other artists. This can increase your visibility and streams.

  • Create Themed Playlists: Build playlists around different themes, moods, or occasions, incorporating your songs. Develop a brand around this.
  • Collaborate with Other Artists: Feature songs from artists with a similar style to cross-promote each other.
  • Update Regularly: Keep your playlists fresh by regularly adding new tracks.
  • Promote Playlists: Share your playlists on social media and other platforms to increase their reach.

Interact with Fans

Engage with your fans through Spotify’s social features. Share updates, upcoming shows, and new releases.

  • Respond to Comments: Engage with fans by responding to their comments and messages.
  • Share Behind-the-Scenes Content: Post exclusive content about your music-making process.
  • Host Q&A Sessions: Use Spotify’s social features to host Q&A sessions and connect with your audience.
  • Exclusive Previews: Offer sneak peeks of upcoming releases to your most engaged listeners.

Marketing Your Music

Leverage Social Media

Use social media platforms to connect with your fans and promote your Spotify tracks. 

  • Cross-Platform Promotion: Promote your Spotify tracks across various social media platforms.
  • Get Personal: Don’t be afraid to give your followers a look into your daily routines, even if you don’t think anything is that interesting. Fans admire relatable content.
  • Collaborate with Influencers: Partner with social media influencers to reach a broader audience.
  • Social Media Campaigns: Create campaigns around new releases, including countdowns and teasers.
  • Engaging Content: Post engaging, interactive content that encourages your followers to stream your music on Spotify.

Release Music Consistently

Regular releases keep your audience engaged and can boost your stream count.

  • Scheduled Releases: Plan a release schedule to maintain a steady flow of new music.
  • Diverse Content: Release different types of content, including singles, EPs, and albums.
  • Teasers and Previews: Build anticipation with teasers and previews of your upcoming releases.
  • Feedback Loop: Use listener feedback to improve and tailor future releases.

Monetizing Beyond Streams

Merchandising

To some, this might be the most surprising way in which artists make money on Spotify. Interestingly, Spotify allows artists to sell merchandise directly through their profiles. This can be an additional revenue stream.

  • Diverse Merchandise: Offer a range of merchandise, such as apparel, accessories, and exclusive items.
  • Limited Edition Items: Create limited edition or special merchandise tied to album releases or tours.
  • Easy Purchase Process: Ensure a seamless purchasing process directly through your Spotify profile.
  • Promotion of Merchandise: Use your music and social media channels to promote your merchandise.

Spotify Pre-Save Campaigns

Encourage fans to pre-save upcoming releases, which increases their chances of being featured on playlists. This can increase initial streams and visibility upon release.

  • Incentivize Pre-Saves: Offer incentives like exclusive content or discounts on merchandise for pre-saving. You can also partner with other artists or brands to push this initiative. 
  • Social Media Integration: Integrate pre-save campaigns with your social media strategy.
  • Track Campaign Performance: Use analytics to track the effectiveness of your pre-save campaigns and adjust strategies accordingly.

The Role of Playlists in Revenue Generation

Editorial vs. Algorithmic Playlists

Spotify’s playlists are a mix of editorially curated and algorithmically generated lists. Getting featured on these can significantly increase an artist’s streams and visibility.

How to Get Featured on Playlists

  • Pitch to Spotify’s Editorial Team: Use Spotify for Artists to submit your unreleased music for playlist consideration.
  • Optimize for Spotify’s Algorithm: Regularly update your profile, release new music, and encourage saves and shares to improve your chances of being picked up by algorithmic playlists.

The Future of Spotify and Artist Revenue

Spotify continues to evolve, introducing new features and opportunities for artists. Understanding how artists make money on Spotify and adapting to these changes is key to maximizing revenue potential on the platform.

Spotify offers a dynamic and accessible platform for artists to monetize their music. By understanding how the system works and actively engaging with the platform’s features, artists can optimize their presence and revenue on Spotify. Whether you’re a seasoned artist or just starting, Spotify opens doors to global audiences and revenue opportunities.

Building Your Music Business and Career

​​Remember, the music industry is not just about talent; it’s also about strategy and presence. Sometimes, we musicians have a hard time with the latter. That’s why Eleven has developed a community and coaching platform designed to support musicians in building successful careers and functioning businesses. Eleven’s platform connects artists with real industry professionals to guide them through their journeys, whether they’re starting from square one or need help taking their careers to the next level.

Join today to start building your career.

Join Career Musicians Made Simple today to access Music Career Success Specialists who are available to help you grow and see you succeed

Stop Feeling Isolated & Let’s Build Your Music Career Together

Are you a serious career musician looking for help from real industry humans?

Are you fed up with the lack of help from the many online music cliques?

Join Career Musicians Made Simple today and gain access to:

  • Music Career Success Specialists who truly care about your success
  • A community of musicians helping each other overcome similar struggles
  • Guides and frameworks that give you tangible results when applied properly
  • Special live events that let you ask questions and get focused attention
JOIN CAREER MUSICIANS MADE SIMPLE TODAY

Stop Feeling Isolated & Let’s Build Your Music Career Together

Are you a serious career musician looking for help from real industry humans?

Are you fed up with the lack of help from the many online music cliques?

Join Career Musicians Made Simple today and gain access to:

Join Career Musicians Made Simple today to access Music Career Success Specialists who are available to help you grow and see you succeed
  • Music Career Success Specialists who truly care about your success
  • A community of musicians helping each other overcome similar struggles
  • Guides and frameworks that give you tangible results when applied properly
  • Special live events that let you ask questions and get focused attention
JOIN CAREER MUSICIANS MADE SIMPLE TODAY