A couple of weeks ago I wrote a post (see here) about how concert tickets have been getting more expensive. I touched on two main explanations for this, one is inflation, the other is the change in revenue artists make from selling their music. Artists used to sell millions of records and would see a piece of revenue for each record sold, however, nowadays fewer people buy records and more stream music. This means that artists have started to charge more for their live shows than they did previously to make up the loss they are making on selling their music.
But Spotify still pays artists for their music so this got me thinking, how little are artists earning from their music on streaming sites like Spotify? I found the answer on a YouTube video (see here) which was made by an American musician, Tom DuPree III. He explains in the video that the average amount an artist makes per stream is between $0.003 to $0.004. So, let’s be optimistic and say that it’s $0.004 and try and figure out how much some of today’s artists make. The first artist I said I’d look at is one of the biggest in the world because I wanted to see how much the big players in music make, so I took a look at the number of streams for Ed Sheeran’s top 5 songs on Spotify.
As can be seen above Ed Sheeran’s top 5 songs on Spotify have been streamed 6,146,214,247 times which translates to $24,584,857 which is €21,647,581. To see how lower tier artists get on with the revenue per stream from Spotify I took a look at how much the Irish pop band Picture This makes off of their top 5 songs. Who by the way, are less successful than Ed Sheeran but still one of the most popular bands in Ireland.
As can be seen above Picture This’ top 5 songs on Spotify have been streamed 40,413,103 times which translates to $161,652 or €142,338. Which is considerably less than Sheeran’s however still not bad money to make just off people listening to 5 of your songs. Something to keep in mind though is that the revenue generated from the streams rarely goes to one person.
There is a lot of people have a part in making a song which get’s played on Spotify. There are the performers who play the song, the composers who write the song, the producers who help record and master the song, the music streaming service, and record company which release it. So, while these sums may seem very large, they end up going to many different parties who all take their own slice of the pie.
In any case it does seem that while the shift in the music industry has allowed a lot more artists to produce music, the artists that still make the majority of the money from their music are the very big players like Ed Sheeran. If you are interested in keeping up with more analysis of the Irish music industry, please give Music Economics a like on Facebook.