Spotify has become synonymous with music streaming, providing a global platform where artists can reach millions of listeners. But as the platform continues to grow, serious concerns have emerged about whether Spotify for artists serves artists, or if it’s self-serving, offering low payouts that devalue the work of musicians. Let’s dive into the numbers and the impact of Spotify’s model on the music industry.
Are Low Payouts Undermining Artists?
The reality for most artists is that Spotify’s payouts are shockingly low. For every stream, artists earn fractions of a penny, far below what many believe is fair for the value of their work. This issue has persisted for years, and while Spotify has become a dominant player in the music industry, it’s come under fire for putting profits ahead of artists’ welfare. Spotify for artists appears to be not exactly for artists. According to reports, the average revenue per user (ARPU) for streaming services like Spotify has fallen by 40% since 2016, and the revenue per streaming hour is four times lower than that of video platforms like Netflix(Music Week)(Digital Music News). This data reflects the fundamental under-monetization of music, and artists are feeling the brunt of it.
Despite Spotify’s massive user base, their low payments force many artists to seek alternative sources of revenue, whether through live performances, merchandise, or fan engagement. Even major artists, such as Eminem, have faced battles over unpaid royalties from millions of streams, raising questions about transparency and fairness in streaming (Music Week). Spotify for artists seems to be a little untrue despite their “Spotify For Artists” branded.
The Role of Superfans in the Music Industry’s Future
While Spotify and other streaming platforms struggle with low revenue per stream, recent studies show that superfans are becoming increasingly critical to the music industry’s future. The 2023 Goldman Sachs “Music In The Air” report highlighted superfans as a key revenue driver, particularly as major labels shift toward monetizing this highly engaged audience. Major label CEOs now view superfans as essential for the next phase of industry growth, with estimates showing that superfans contribute significantly more per fan than casual listeners.
Superfans are willing to pay for exclusive experiences, content, and direct artist engagement, which offers a powerful alternative to the low payouts from streaming platforms. This shift has made it clear that artists should focus on building deeper connections with their most loyal fans, rather than relying on the fleeting and unpredictable income from streams.
Are Music Streaming Platforms Broken?
The industry is facing what Goldman Sachs calls a “major structural change,” where outdated streaming royalty payout models no longer align with how music is consumed and valued. While platforms like Spotify are increasing subscription prices, there’s little evidence that these changes are benefiting artists in any meaningful way. This raises a critical question: Is Spotify for artists? As streaming companies negotiate licensing deals with major labels, artists often find themselves left behind, earning far less than they should.
According to the 2023 Goldman Sachs report, global music revenues are projected to reach $151 billion by 2030, but much of this growth is being driven by live performances, publishing, and superfans—not streaming. The writing on the wall is clear: artists can no longer rely solely on streaming platforms like Spotify to sustain their careers.
The graph illustrates the decline in the number of new Spotify premium subscribers from 2016 to 2023. While the platform experienced significant growth in new users during the earlier years, peaking around 2020 with 40 million new subscribers, the pace has slowed in recent years. By 2023, the number of new subscribers had dropped to 16 million, reflecting the challenges in sustaining rapid growth as the market becomes more saturated. This trend highlights the potential plateau of user acquisition in mature markets.
The Solution: Direct Fan Engagement
At FanCircles, we believe there’s a better way for artists to connect with their audiences and control their revenue. Rather than relying on platforms that offer minimal payouts, artists can leverage their superfans—those who are willing to pay for premium content, exclusive access, and deeper engagement.
Our platform provides artists with the tools to build their own branded apps, giving them full control over their fanbase, content, and income. By cutting out the middleman, artists can focus on delivering value directly to their most passionate supporters, ensuring they are compensated fairly for their work.
Is Spotify For Artists?
While Spotify may provide exposure, its low payouts are detrimental to artists who deserve fair compensation for their music. In today’s music landscape, it’s becoming clear that superfans are the key to an artist’s long-term success. As the industry evolves, artists must look beyond streaming platforms to take back control of their content, their data, and their financial future. So, is Spotify for artists? I don’t think so.
If you’re ready to build deeper connections with your fans and take control of your career, FanCircles is here to help.
