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this post was submitted on 30 Oct 2023
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Doesn't everyone always say that Spotify rarely/barely make a profit? Don't they still have to give most of their money to the labels?
Yeah, from what I can find their operating profit was in the negatives every year.
Not sure how much of their costs go to the label vs. Server and employee costs, though. It's possible they take more of a cut than retail stores do regardless. Bandwidth isn't cheap, and software devs aren't cheap either.
In any case, the artist sees very little of that money.
They have 10000 employees. No, I don't understand why, either. They take the vast majority of the cut. They pay somewhere between $0.002 and 0.005 a stream. So if you stream your favourite song 500 times, your favourite artist might get a penny depending on label cut.
I'm seeing $0.003-$0.008 per steam, still peanuts though. Same article says the following though:
so it's not like Spotify are taking all the money from the artists, it does seem like it's still the labels raking it in.
this is a really helpful place to talk about how profits != revenue.
So after spotify pays itself all the money it might want to take from subscriptions and ad revenue, you are left with the "profits" which now get split 30% in favour of spotify.
True, it's all creative accounting to obfuscate what's actually going on