Spotify has played no small part in driving down the earnings of recording artists, and its low premiums are a big reason why. For the first time in 12 years, though, the ubiquitous streaming platform will raise that monthly amount from $9.99 to $10.99 for U.S. users.
52 other markets will also see a rate hike. Among them are the U.K., Australia, Spain, France, Canada, Sweden, Israel, Indonesia and Mexico. Spotify’s Family Plan will also cost 1$ more per month, taking it from $15.99 to $16.99.
According to Music Business Worldwide‘s calculations, the premium increase will translate to an additional $5.57 of profit for per account experiencing a rate hike per year. Multiplied by 44.4 million — the total number of Spotify users in the the U.S. in February — that translates into an additional $247 million annually. This doesn’t take into account the remaining 52 markets, which collectively account for hundreds of millions more.
So then, how much of this will trickle down into the hands of creators? That much is hard to say. Spotify is notoriously opaque when it comes to breaking down how it pays out royalties.
The streaming service generally takes a 30% cut and pays the remaining 70% to uploaders. A number of factors determine the original amount, however, meaning that artists and labels are entitled to anywhere from $0.001 to $0.008 per stream. In theory, at least, if the same split applies under the new premium, it will mean more money for musicians.
Spotify isn’t the first major streaming platform to hike its rates in recent memory. A matter of days ago, YouTube Premium increased by $2 to $13.99 per month. YouTube Music also raised its rates in step with those of Spotify from $9.99 to $10.99 monthly.
This begs the question: Is Apple Music next?
