> Spotify pays artists between $0.003 - $0.005 per stream on average. That works out as an approx revenue split of 70/30 - so that's 70% to the artist/rights holders and 30% to Spotify.
So Spotify takes ~30% cut?
> So Spotify takes ~30% cut?
According to the calculator, for 10M streams, Spotify pays the label (really, the sound recording owner) $38,917 (0.38¢/stream), while Apple pays $66,840 (0.668¢/stream).
In the "1M Streams" charts on that page, Spotify keeps 50% of the total and pays creators/rights-holders the rest, while Apple keeps 29%.
Spotify's pie is: $7,631
Apple's pie is: $10,711
The way this information is displayed feels very dishonest to me. The display implies Apple is better for artists, but the reality this displays when analyzed for more than how it is presented is that apple is using anti-competitive practices to unfairly offer artists a better deal.
Both pies being displayed the same size, despite that one is physically larger, hides relevant information.
I think owning the app store and having an app that competes with other apps on it is a clear and odious conflict of interest. If that were the main argument against apple, I would be a strong supporter of Apple targeted regulation. Apple's cut is fine, being able to take that cut directly from your competition offering you a clear and unfair competitive advantage is not.
There's definitely some weirdness here. For example, the "1M Spotify Streams" pie obfuscates that Spotify's share is 50% by making it look closer to 37%.
> Apple's cut is fine, being able to take that cut directly from your competition offering you a clear and unfair competitive advantage is not.
Spotify has never paid Apple a penny. In 2016, Spotify turned off that feature. Before that, they passed along that cost to customers who subscribed via App Store.
There's zero evidence that Spotify handed Apple a competitive advantage by preventing their customers from subscribing via App Store. As Variety noted in 2019, less than 1% of Spotify subscribers signed up via App Store. https://variety.com/2019/digital/news/apple-spotify-fees-sub...
> Spotify's pie is 28% smaller than Apple's which is suspiciously close to the app store fee.
As the same Variety article notes, Apple's cut of Spotify subscription fees attributable to App Store was only 15%. And again, Spotify just passed this cost directly to their customers who subscribed via App Store, just as X does today.
FWIW, in that case Spotify is still paid, just by advertisers.
Exactly - Apple is paying both sides of the fence here
Competing with Spotify and at the same time having the boot on their neck
Unfortunately this is the capitalist curse/destiny. A computer company is now making Movies, a Music streaming app and building cars
They can buy Disney and knock over Netflix - there are no bounds
It’s all about the TAM
In an effort to be more accurate, this is the official financial report from Spotify to shareholders:
https://s29.q4cdn.com/175625835/files/doc_financials/2023/q3...
It claims $3,357 million in revenue, and it claims that revenue cost them $2,472 million.
Which implies they are taking at least a 26% cut. I am a financial layman, so perhaps someone with more expertise could correct me if my understanding is wrong.
No, that implies they get at most a 26% cut. But cost of revenue includes everything needed to deliver the service. That includes infrastructure, maintenance, all the people working on that stuff, bandwidth, etc. So the actual cut must be much lower.
Any money in cost of revenue not going to artists for the purposes of running infra/maintenance, etc. is part of Spotify's cut. Therefore 26% is a lower bound and spotify may be taking more than 26% of the total money earned by subscriptions. We can assume that all gross profit did not go to artists, which means gross profit is the lower bound of Spotify's cut.
I think you are asking what percent of profit do artists get, while I am asking what percent of income do artists get.
I think when comparing this to the Apple App store. Apple is taking a 30% cut of income, not a 30% cut of profits, so asking what cut of income spotify is taking is appropriate.
[1] https://dittomusic.com/en/blog/how-much-does-spotify-pay-per....
Others claim Spotify is great for being discovered [2] and that this is where its value lies for them (as artists).
[1] https://www.nytimes.com/2021/03/22/technology/streaming-musi...
[2] https://www.reddit.com/r/spotify/comments/13v4i4k/spotify_pa...