“Definitive Guide” to Spotify’s updated royalty system pits labels vs. artists

Jeff Price, indefatigable advocate for independent musical artists, has produced an information/fact sheet which explains how Spotify royalty calculations and payments work. It is published in Digital Music News. Jeff Price is the founder of indie distribution company TuneCore and the digital music royalty collection company Audiam. His work here is deep, complex, illuminating, and freely available.

Price’s effort comes after Spotify made significant changes to its payment allocations. Notable in those changes is Spotify’s decision to disregard tracks which have been streamed fewer than 1,000 times in a royalty period. (RAIN coverage HERE.)

Carrying the weighty title “The Definitive Guide to Spotify’s Changes In Sound Recording Royalty Calculations — And Its Impact on Artists,” the 26-page PDF (available HERE) is part explainer, part statistical sheet, and part accuser. “The New Boss: Same as the Old Boss?” is the final section head. “In the thirty years I’ve been in the music industry, almost everything has changed except for one thing: major music companies finding new ways to make more money at the expense of the artist,” the author states.

Jeff Price

An alternate view of Spotify generally might argue that the platform’s main offering to musicians is a vast global addressable audience; the artist’s reach in that market is up to the artist. But there is no arguing with Jeff Price’s mapping of Spotify’s royalty landscape; he offers the most complete and detailed view of how it works for music owners at all levels, including tables showing exact stream levels and royalty dollars for major labels and indie distributors. It is an exceptional and monumental piece of work.

The streaming ecology, as represented in Jeff Price’s document, includes three major labels (Universal, Warner, Sony) and three important distribution companies which funnel indie recordings into Spotify and handle outcoming payments (DistroKid, TuneCore, CD Baby). Each is assigned a share of “Big Pot” — itemizing the number of streams and dollars.

Chapters explain Spotify’s recent royalty method changes, legal implications, scorecards of winners and losers, and detailed examples. Not light reading, but the most detailed elucidation of the indie musician’s royalty environment in the world’s dominant music streaming platform. See it HERE.

Brad Hill