for my band to have received the same 76-cent payout as a single purchase on iTunes.
This does not add up in any meaningful way until you get into the hundreds of thousands
of streams, although it is a marked improvement over the way artists were initially com-
pensated by Spotify (Lady Gaga received $167 after her song “Poker Face” hit 1 million
streams on Spotify in 2009, or 1.67 thousandths of a cent per stream.)”
Reitz added, “When confronted about their business model, Spotify vigorously re-
futes the idea that they are anything other than the next great revenue source for artists. In
a recent interview, a Spotify spokesperson said “Spotify is now generating serious rev-
enues for rights holders; since our launch just three years ago, we have paid over $100
million to labels and publishers, who, in turn, pass this on to the artists, composers and
authors they represent. Indeed, a top Swedish music executive was recently quoted as
saying that Spotify is currently the biggest single revenue source for the music industry in
Scandinavia.
If that claim is true, it is certainly impressive, but there’s a serious disconnect here be-
tween what they say and what artists end up receiving per-play on Spotify. Most major la-
bels keep a considerable cut of that .4 cents payout, and independent artists who release
their own material generally don’t have enough marketing power to attract the number of
listeners it would take to make Spotify a better revenue generator than iTunes. In fact, I
might argue that fans pirating our song Friend in the Head could do more for us than had
they used Spotify to listen to it. If 103 people had pirated Friend in the Head instead of
streaming it through Spotify, those 103 people would possess a digital copy of the song,
which means there are dozens of ways they could pass it along to others. They could burn
it to CD and could email it to their friends; They could listen to it using any audio player,