ENTERTAINMENT

Who's making money from Spotify?

By Amit Gurbaxani
07 January, 2022

You read that right. A handful of Indian independent music acts manage to earn a substantial amount of revenue

If you follow musicians on your social media timelines, then it's very likely you saw them share their Spotify Wrapped cards for 2021 last month. The posts told us the quantity of streams and listeners they had during the year as well as the number of hours they were listened to and the countries in which they heard. What they didn't tell us was how much money they banked from these figures. That's a criticism that has long been levied at the likes of Spotify, which finally addressed the issue in March last year.

That's when following months of backlash from musicians worldwide speaking out about how royalties from streaming just don't pay enough for them to sustain a living, Spotify launched Loud & Clear—a web portal presenting data on the number of acts generating different levels of revenues on the platform. Spotify might have thought this would be a great PR exercise, but the stats were somewhat disheartening.

For instance, only 42,100 musicians generated over $10,000 (Rs 7.5 lakh approximately) in royalties from the digital service provider in 2020. That's just 0.5 per cent of the eight million creators who distribute their content on the service. Also, $10,000 is less than minimum wage in the US. On the other hand, Spotify is not the only streaming platform from which artistes earn revenue. But it is the most dominant.

In India, because of the dollar exchange rate, $10,000 seems like a more decent sum. However, Spotify did not break down its figures on a country-wide basis. It's safe to assume that barely any Indian independent artistes—which we define as those that aren't on major or mainstream music labels—make that amount. The most streamed indie act on Spotify in India, Ritviz, banked Rs 1.53 crore from 17 million plays across audio OTTs between April 2020 and March 2021. The bulk of these—around 70 per cent—were from Spotify, on which he has over 1.9 million monthly listeners and six hits with more than 14 million streams. Ritviz, it should be said, is an outlier.

"ALGORITHMIC PLAYLISTS BASED ON THE 'FOLLOW AN ARTISTE' FUNCTION ARE GREAT TO ENSURE LISTENERS ARE MADE AWARE OF NEW RELEASES BY LEVERAGING TOOLS LIKE RELEASE RADAR ON SPOTIFY."
- Aayushman Sinha

Anuv Jain's seasonal smash Baarishein was on Spotify's top 200 charts for India

While royalties help pay for the marketing and production, it's hard to live off of it, says Dhruv Visvanath

Streaming success

Another indie artiste who has been doing impressively well on the Swedish service recently is singer-songwriter Anuv Jain whose seasonal smash Baarishein was on its top 200 charts for India from mid-April to mid-October. The last time we checked, Baarishein had crossed 30 million plays on Spotify, where each of his six other singles boasts upwards of four million streams. Jain then is a bonafide streaming success. But how does this translate into his ability to sustain his life and career?

The answer isn't straightforward because, as Spotify itself explains on Loud & Clear, the per-stream rate received by a particular act depends on several factors. These include the number of their listeners using free ad-supported accounts, the number of subscribers hearing their songs, and the musicians' individual deals with labels and distributors.

According to Aayushman Sinha, the founder of Represent, the management company to which Jain is signed, there are three layers to an act's success in monetary terms:

  • When they recover all costs related to a project.

  • When they recoup a multiple of their initial investment to enable them to record and release more music.

  • When they're able to pay for basic livelihood expenses.

"Different artistes on our roster are at different levels," says Sinha. "Anuv has comfortably passed all three while [rapper] Yashraj hasn't had to invest in his music from his pocket beyond his first six releases."

Pop-rock band When Chai Met Toast has at least eight million songs on Spotify

How much do royalties help?

In my conversations with the team at Spotify, they've cited vocalist-composer Dhruv Visvanath as one of the Indian independent acts making significant money from the DSP. Visvanath doesn't have a single tune with over a million plays on the platform, but two of his albums, 2018's The Lost Cause and 2021's The Book Of I, have collectively crossed the milestone. Visvanath says that while, "the royalties collected helped pay for a lot of the marketing and production for my releases, it's hard to see how one could live off of it."

In contrast, pop-rock band When Chai Met Toast has at least eight million-plus songs on Spotify but being a quartet in which the revenues get split four ways, they've only reached two of Sinha's layers mentioned above. Their manager Kishan John told us that the group could "fund recordings and basic salaries of the members" from what they receive from the services, mainly Spotify, Apple Music and YouTube. Live performances remain "the major form" of income for the band, says John.

This situation has put pressure on artistes to get back on the road as soon as possible. For example, just before the devastating second wave of the pandemic in March, When Chai Met Toast played a nationwide tour. Back then, the Mumbai and Pune legs had to be cancelled because of rising cases in those spots. They embarked on another countrywide trek last month. This week, they announced that shows in each of the seven cities they were scheduled to play in January have been postponed because of rapidly increasing infection counts. With their easy-to-like sound, the group is somewhat of a playlist editor's favourite, having been featured in both Spotify's Radar and Apple Music's Up Next promotional programmes. But editorial playlists, as both Sinha and John point out, contribute only between 10 per cent and 15 per cent of an act's audience.

Therefore, artistes should urge their fans to follow them on the DSPs. "Algorithmic playlists based on the 'follow an artiste' function are great to ensure listeners are made aware of new releases by leveraging tools like Release Radar on Spotify," says Sinha. "These really help drive week-one streams, which further help make a case for better editorial placements."

“CONSISTENCY IS KEY; THE MORE YOU RELEASE, THE BETTER YOUR CHANCES OF BEING SEEN.”
- Dhruv Visvanath

Visvanath has another piece of advice. "Consistency is key; the more you release, the better your chances of being seen," he says. This means "singles over albums [and] spreading [them out] over months." The fallout of this is that artistes often feel like they're in a factory, mass-producing goods on a metaphorical conveyor belt. "I have to create almost like a YouTuber," says Visvanath, who took out most of the tracks from his last album, The Book Of I, as singles through the last couple of years.

The jury may be out on how far streaming services have helped or harmed musicians' ability to earn money from their records. Still, there's no debate on how they've enabled artistes to distribute their releases far and wide without the aid of labels. As Visvanath says, "For me, the real success is that people really enjoy the music and come back to it again and again, because it was easy to find and share."

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