On Spotify, not all songs are created equal; sometimes not even the same song is created equal—at least when it comes to how its creators are compensated.
The Wall Street Journal reports to an analysis of data supplied by Spotify AB to music publishers. It takes five to seven plays of a song on the streaming service’s free “tier”— which makes its money from ads—to generate the same amount of royalties as a single play on Spotify Premium, which charges users $10 a month.
Last December, a single play on Spotify Premium was worth an average of about 0.68 of a cent in royalties, according to the analysis, conducted by Audiam, a company that helps music publishers collect digital royalties. In the same month, a single play on Spotify Free was worth an average of about 0.14 of a cent, about one-fifth the value on the subscription. (Royalties generally are due to record companies and music publishers; how they are shared with performers and songwriters depends on their contracts.)Some in the music industry want Spotify to set stricter limits on the free tier, either by reserving certain music for paying subscribers, or by making people start paying after a certain number of months on the free service.
Spotify argues that the open-ended free service is a way to convert listeners to subscribers.
The share of Spotify users paying for the Premium service fell last year, to 25% of its 60 million active users. A year earlier, the company told music companies, paying subscribers represented 28% of its users. The company says that ratio moves both up and down from month to month.
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