Money Grab: Major Labels Keep 73% Of Spotify Premium Payout

metalinjection

metalinjection

Singer/Songwriter Aloe Blacc penned an op-ed piece for Wired magazine last year that outlined his issues with streaming services such as Spotify and their low payouts to artist.

Blacc used his pen to voice his outrage with the $2000 he was paid for having the the most streamed song in Spotify history with “Wake Me Up.”

There might be some truth to what Blacc was saying.

A report on Musicbusinessworldwide shows how Spotify breaks down payments between labels and the little that trickles down to the songwriter themselves.

French recorded music trade body SNEP, whose members include Universal Music, Sony Music and Warner Music,  ran a recent study with Ernst & Young to discover where money paid by a subscriber to the likes of Spotify or Deezer ultimately ends up.

As you can see below, in terms of the turnover that these platforms generate, the major labels (‘producteurs’) take home the lion’s share, pulling in an average of €4.56-per-subscriber every month after tax.

In terms of the total subscription payment, that’s a 46% share of the spoils.

However, further analysis from MBW gives a more interesting split: who takes home what from the revenues paid out by streaming companies to music rights-holders.

If SNEP’s figures are correct, €6.24 of every €9.99 subscription is paid to music rights-holders – that’s what’s left after tax and the digital platforms’ fee.

That would means the labels keep 73% of payouts from Spotify/Deezer etc.

They’re followed by writers/publishers with a 16% share, and then artists – mostly paid by their labels – who get 11%.

How do labels justify taking such a big chunk out profits like that? Read more here 

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