Recently, Spotify released your yearly statistics with minutes listened and your favorite artists. It probably was not hard to miss as almost all your friends shared it on social media. For me, it was the first year using this music platform which made me pleasantly satisfied.
So my first question was how do artists make money using platforms like Spotify, Apple Music, and Google Play Music. With the development of subscription platforms, where you do not have to purchase every song or album, as it was before, you can enjoy large music and podcast libraries. Let’s talk about artists let’s talk about us, as listeners.
There are two main subscription options on Spotify, free and premium. The free one has limited access to the artist’s new songs, how many songs you can scroll and mainly gets its funds from advertisements, so does the artists. The premium profile helps you to become a real music nerd and go deep into your taste search.
After a quick search, it turns out that Spotify pays artist royalties based on the streaming share. They may vary based on the country, the number of listeners and overall streams. Profits are distributed after paying taxes and fees paid for the usage of the platform. But artists are not the only ones who should worry about their share.
Spotify is facing rising competition from the Apple Music, and other streaming platforms such as YouTube Music, Google Play Music, Sound Cloud. Oh well, but good old Apple knows how to fight for its market share. In the spring of 2019, Spotify filed an antitrust complaint within the EU accusing Apple of unlawfully using its Apple Store dominance to favor Apple Music. Why is this the case? In the complaint, it said that Apple had required all iPhone app makers to use only the payment system created by the company, Apple Pay. Mr. Ek, Spotify chief executive, said that they have to pay 30 cents from each payment transaction for the usage of the Apple payment system for the past eight years. In its defense, Apple commented on it “ we have created a secure platform for our users to assure the security of the payments and customers data.” This puts Spotify in quite a delicate position as they cannot take its app from the Apple Store, and are quite unwilling to increase the subscription fee for its customers. Moreover, they are still on the battlefield with the tech giant. Mr. Ek said Spotify was also concerned that the company has been “locking Spotify and other competitors out of Apple services such as Siri, HomePode and Apple Watch.”
After the IPO in April of 2018, Spotify took its business and the fight for customers game on the new level. To gain more listeners they start to work on the platform Spotify Artist that helps music bands to download music to their platform directly through their channels. This seems like a great benefit for the bands without a label contract. The artists get help and tips from the research team and monthly statistics from their listeners base. But, this is not enough to fight the tech giant. That is why Spotify should work on its original content like Netflix, to keep its customer base. Rumor has it, they are working on a portable device to put in your car that stores all your podcasts and favorite songs. Let’s be honest, every modern car now has Bluetooth, which makes it easy to connect your phone and play your jam music of the day or a podcast with brief news.
In order to gain new users, Spotify has to expand to new markets. A large customer base is still lying in Europe. Now they are making an effort to attract more listeners from India, lowering the payment plan to almost one dollar per month. However, even such a price reduction didn’t help much, as most of the platform users do not switch to the premium account, or use another platform, for example, just playing music on YouTube. Spotify is soon to come to such markets as Russia, the Middle East, and Asia.
Podcasts can become a golden ticket for Spotify. Helping users to work on their original content and be the first one to post it through their platform. I hope that in the near future, we will enjoy Discover Weekly playlists with some tasty sprinkles from Spotify’s original content.