Introduction

Spotify has dramatically changed the way we listen to music, offering a vast library of songs that can be streamed on demand. With hundreds of millions of active users as of December 2022, it's no surprise that Spotify has become one of the most popular music streaming platforms in the world.

The question at large is how do artists, music producers and music rights holders make money on Spotify? While it's true that streaming has disrupted traditional models of music monetization, there are still several ways for artists to generate additional income through the platform.

In this blog post, we'll be exploring the various opportunities available to artists looking to make money on Spotify. From royalties and promotional tools to advertising and merchandise sales, we'll provide a general overview of the different ways that artists can monetize their music on this popular streaming service. 

Royalties

One of the main ways that artists and music producers can make money on Spotify is through royalties. Whenever a song is streamed on the platform, the artist and songwriters are entitled to a royalty. If an artist or music producer is independent and releases their own music, these royalties are paid through their digital service provider/distributor. The other performance royalties are collected by the artists performance rights organization (PRO) such as ASCAP or BMI.

The amount of money an artist earns in royalties depends on a variety of factors, including the number of streams they receive, the terms of their record deal, and the specific royalty rates set by PROs. While streaming has significantly reduced the amount of money artists make from album sales, it has also created new opportunities for artists to earn income through the sheer volume of streams they can receive.

It's important for artists to understand how royalties work and to make sure that they are registered with the appropriate PROs so that they can receive their fair share of income. By keeping track of their streams and working with their record label or PRO to ensure that they are properly paid, artists can maximize their earnings on Spotify.

Spotify for Artists

In addition to royalties, artists can also make money on Spotify through the use of the platform's "Spotify for Artists" service. This service is designed specifically for artists and their teams, and offers a variety of tools and resources to help them promote their music and grow their careers.

Think of this platform like the back panel to a social media platform, where you can update information, tours, events, photos and engage with fans.

One of the key benefits of Spotify for Artists is the ability to access detailed data about an artist's listeners. This data includes information about how many streams an artist is getting, where their listeners are located, and what other artists they are listening to. This information can be incredibly valuable for artists, as it allows them to understand the demographics of their audience and tailor their promotion efforts accordingly.

Spotify for Artists also includes a number of promotional tools, such as the ability to create personalized artist playlists and pitch songs for inclusion on editorial playlists. These tools can help artists reach new listeners and increase the visibility of their music on the platform.

Merchandise

Artists can also make money on Spotify by selling merchandise through their artist page on the platform. Many artists have taken advantage of this opportunity to sell a variety of items to their listeners, such as t-shirts, hats, and other merchandise.

To sell merchandise on Spotify, artists must first create a shop on the platform and then upload their merchandise items. Once the shop is set up, listeners can browse and purchase items directly from the artist's page. Spotify handles the payment processing and fulfillment of the orders, making it easy for artists to sell their merchandise to their fans.

While the revenue potential from merchandise sales on Spotify may not be as high as from other sources, it can be a good way for artists to generate additional income and connect with their fans.

Tickets and touring

In addition to selling merchandise, artists can also make money on Spotify through ticket and touring sales. The platform offers a feature called "Tour Dates" that allows artists to promote their upcoming shows to their listeners. This feature includes a list of all the artist's upcoming tour dates, as well as links to purchase tickets.

By promoting their shows on Spotify, artists can reach a large and engaged audience of music fans who are likely to be interested in attending their shows. This can be a powerful way to drive ticket sales and increase an artist's income from touring.

To use the Tour Dates feature, artists must first set up a profile on Spotify for Artists and then add their tour dates to the platform. Once the tour dates are added, they will automatically be displayed on the artist's page for listeners to see.

Conclusion

In conclusion, there are multiple ways for artists to make money on Spotify, including through royalties, Spotify for Artists, merchandise, tickets, and touring. It is important for artists to explore these opportunities and find what works best for them to earn and grow their audience. Some artists may find success through one avenue, while others may need to combine a few different strategies to see the best results. No matter what approach you take, it is crucial for artists to continually evolve and find new ways to monetize their music and reach their audience. By staying up to date on the latest trends and opportunities, artists can maximize their potential for financial success on Spotify and beyond.

Arkatech Beatz (Jugrnaut & Mike “Trauma” D) are a Grammy nominated music production team from New York now based in Atlanta. They were affiliated with Loud Records/Sony Music Entertainment as A&R’s and have produced for artists such as Big Pun, Nas, Raekwon, Jadakiss, Prodigy of Mobb Deep,The Game, Waka Flocka Flame, Freddit Gibbs, Killer Mike, Mýa, Max B and others. They are the host of The Arkatech Beatz Music Business Podcast.  Arkatech Beatz are also authors of The Songwriter's Guide To Song Registration .