By Jason Epstein
Recently, music streaming service Spotify released data revealing that each song play nets rights holders somewhere between $0.006 and $0.0084. Yep, a fraction of a fraction of a cent. Doesn’t seem like much, does it?
However, Spotify generates an average of $41 per user, which is significantly more than the $25 that Spotify says the average U.S. adult pays for music each year. Last year, the company lost $80M, but just last month, gained $250M in new funding, which brings the company’s value just above $4B. One million plays on Spotify will generate between $6,000 and $8,400. Compare that to $3,000 on YouTube, or between $1,300 to $1,500 on Pandora, or $41 on a radio station, and Spotify’s payout doesn’t seem so bad. The difference is that Google has a billion YouTube users and Apple has 600 million iTunes users, while Spotify has just above 24 million users, about a quarter of whom are actually paying for the service.