How Pandora and Spotify Pay Artists in 2021

Long ago, in the dawn of the Internet age, pirates ruled the digital waves and music-lovers found, to their delight, that anything could be downloaded for free. Sales of recorded music crashed. Every musician was playing the blues.

Those days are over, but the road to a business model that works for Internet companies, music producers, and recording artists remains rocky.

Two Digital Players

Spotify and Pandora are two of the big names in Internet music delivery

They used to be quite different. Pandora focused on free, advertiser-supported music with limited customization. That made it, basically, a radio service delivered over the Internet. Spotify was primarily premium radio. It has a free service, too, but its purpose is to drive the listener towards a subscription.

As it turns out, Internet users expect a high degree of choice and personalization and are willing to pay for them. The Pandora audience began to shrink while Spotify's continued to grow.

80% The percentage of music industry revenue that comes from streaming music royalties.

As of Q4 2020, Pandora had 6.3 million paid subscribers and Spotify had about 155 million.

Pandora also is playing catchup in its music catalog. Until recently, it had somewhere between one and two million songs and now boasts a 40 million song catalog compared to Spotify's 50 million.

Music Promotion

How Pandora and Spotify Pay Artists in 2021

Spotify promotion

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The Best Organic Spotify Promotion Tips

Can you believe that Spotify has been around since 2006?!

It feels like only yesterday that I was creating some of my first playlists, consuming music from bands that I’d never before heard of.

Since Spotify’s launch, it has grown in popularity and is currently boasting a whopping 271 million users. That’s a huge amount of potential fans for your latest release! However, there’s so much more to releasing a single than just uploading it to Spotify.

The streaming platform provides a range of promotional tools to help boost your fan engagement – Driving in those much-wanted streams and royalties!

How To Pitch Songs For Spotify Playlist Promotion & Spotify Promo

Every artist dreams of having their music placed in an official Spotify playlist. Not only does it introduce your music to potential new fans, but it also generates a crazy amount of streams (and we all know what streams equal).

But, how do you get your next release placed on an official Spotify promotion artist playlist? Well, here’s how:

Before you release your next single to the world, first upload it to Spotify for Artists. It’s really important that this is done before you release! Simply log into your Spotify for Artists account and click Pitch A Song.

Pitching your next release puts your music directly in-front of Spotify curators – Just what you need to land one of the big official playlist placements! Spotify will also add your song to your followers’ Release Radar Playlists, ensuring all of your fans know about your latest single.

However, it’s not as simple as pitching and waiting. Your Spotify account needs to have fan engagement for Spotify curators to take an interest. This is one of the first steps in Spotify music promotion. Ask your fans to follow you on Spotify and add your music, especially your latest release, into their own playlists. The more traction your music has, the more likely you are to be placed in a big playlist.

Make sure you share playlists that include your music on social media and always tag Spotify in the post. You never know who’s watching!

Using Spotify’s Official Branding

Sharing your music online is one of the best ways to get the word out. However, be smart about sharing information. We’ve already established that your Spotify account needs lots of engagement to interest the big Spotify curators. Therefore, you might as well include links to your Spotify account in your social media posts.

Sharing Spotify links on FacebookTwitter and Instagram will create a Spotify player, allowing potential fans to quickly consume your music – All whilst boosting your streaming algorithms on Spotify itself.

You can also integrate ‘follow me’ buttons and Spotify players into your artist website, allowing fans to engage with your Spotify artist profile account without leaving your site. It’s all done by copying and pasting a simple piece of code, available at Spotify for Artists. This code works with the majority of website builders and social media platforms. Be sure to include Spotify links in all of your platforms – You really want to release new music and get the word out.

The streaming platform has made its official branding (Fonts, Logos, Images) available to artists to aid their real Spotify promotion. Try creating interesting artwork for Instagram – A never before seen band photo perhaps? Include the Spotify logo in the corner of the photo to help soft sell your music on the platform.

Pre-Release Strategies

Unless your music is consumed by the masses, it’s very unlikely that releasing a track with no prior Spotify promotion service will make an impact. The song will likely be swept under the carpet. Nobody will know it exists. Even if you have a large following, it’s always wise to promote your latest release. Spotify promotion companies can help you with this, but you can also attempt to do it yourself if you have a lot of time on your hands!

Want to know how to promote music on Spotify? Here are a few quick-fire tips when planning your next release:

  • Build interest over a period of weeks prior to the release. This is a really obvious Spotify promotion technique, but It’s really important to create a buzz around your new song before its even launched. That way, people will rush to stream/download it the second it’s available. Social media posts hinting at a new song are great, to begin with, but get boring really fast. Be creative. Share short clips of the chorus on Instagram stories and contact music press for reviews.
  • Utilise your mailing list. Hopefully, you’ve been building a large bank of emails when you gig. A fan’s email is one of the most valuable things they can give you. In a world of digital streaming, advertising and audio ads, sending a direct and personal email to each of your fans, telling them about your latest single really goes a long way. You’ll find fans engage with you more through email updates than they will from a simple Facebook post.
  • Run a Pre-Save campaign on Spotify. Like Pre-Order campaigns of old, a pre-save campaign allows fans to order your song on streaming sites like Spotify. The second your track is released, it’s placed directly into a fan’s playlist of their choosing. A great way to drive engagement on your Spotify account! Some pre-save campaigns even request the fans email address before giving access to the pre-save. A great way to build that important mailing list!
  • Boosting social media posts is a fantastic way to ensure fans see your content. Platforms like Facebook are always changing their algorithm. More often than not, only a small percentage of your fan base actually see what you post online. Boosting posts can be a great way to ensure your fanbase see what you have to say. If you’re posting about a new release, only promote the post to your current fanbase. You’ll receive more engagement from existing fans than you will from someone who has never heard of you.
  • Update old YouTube video descriptions so they contain links to your new music. There’s nothing worse than discovering a new band but not having a clear path to hear their latest release. When you promote a Spotify song, make sure to update any links to your music that may exist. YouTube video descriptions are simply one of the most common and easiest to update!
  • We don’t recommend you buy Spotify plays. Check out this article explaining the reasons why. Real, organic Spotify promotion is the only way to go if you want your growth to be sustainable!

Tik Tok

Tik Tok is a fast-growing social media platform. Especially with young demographics. With its current popularity, it seems silly not to captivate on the potential engagement.

Like Instagram, Tik Tok allows you to imbed music from Spotify into your posts. Maybe it’s worth contacting a few friends that use the platform, asking them to include your music in their videos? You never know, their Tik Tok could go viral, bringing your music with it!

Final Words Of Advice On Spotify Promotion

Spotify can make an artist overnight if your music is placed in the right playlist. That’s why so many are desperate to place their song in-front of Spotify curators. The best thing about it is it’s very achievable if you follow the right steps.

My final piece of advice would be: Don’t rush your release. Take your time to plan every movement, every post. Utilise Facebook scheduler to schedule a month’s worth of posts in advance, each including a link to your Spotify account. Plan smart and creative ways of engaging fans to drive your Spotify engagement; stand out from the crowd!

Pitching your music for greater monthly listeners and reaching more professionals in the music industry has become a key strategy for running promotion campaigns for artists. With so many opportunities to promote your music and your Spotify account, there’s no reason why you can’t reach larger audiences every day.

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How Pandora and Spotify Pay Artists in 2021

 

Radio Royalties

Through the rapid growth and expansion of the Internet music industry, controversies have flared between artists and the industry over the perceived lack of proper compensation. In 2014, platinum recording artist Taylor Swift pulled her music from Spotify’s platform to raise awareness of what she deemed inadequate artist compensation.13 She was back on by 2017.

The music industry generates a portion of its income from royalties that are due every time a song is played in public. Public performance includes music played over the radio or through Internet services.

Royalties are payments made to the legal owner of a copyrighted work, which may or may not be the artist who created it. Performance rights organizations collect songwriting royalties from music users and distribute them to the legal owners.

BMI classifies a radio performance as a broadcast that lasts 60 seconds or more. Each performance is categorized as commercial, classical, or college radio.

  • Commercial radio performances encompass music typically played on FM broadcasts, with a potential for bonuses based on popularity.
  • Classical radio is associated with traditional instrumental and vocal performances and grosses 32 cents per minute.
  • Performances played on stations associated with colleges or universities are classified as college radio and pay smaller royalties than commercial stations.

Granted, streaming companies have tried to push the envelope a bit. Back in 2015, Apple Music offered a three-month free trial of its service and quietly told the labels they were not going to pay any rights on their trial use, though it later backed down after a public complaint from (you guessed it) Taylor Swift.

Digital Royalties

How Pandora and Spotify Pay Artists in 2021

Music streaming services continue to proliferate, as exemplified by Pandora, iHeartRadio, Apple Music, and Spotify.

Streaming music accounted for 80% of music industry revenue, according to the Recording Industry Association of America. Total revenues grew 11% to $11.1 billion in 2019 compared to a year earlier.9

The increased revenue share from streaming can be attributed to greater numbers of people signing on to subscription services as well as sales from downloads.

The company JasaSEO.be SMM operates as a fee collector for the industry, charging performance royalties for recording artists and labels whenever music is played through a digital platform. As a representative of the music industry in the digital space, SoundExchange also has negotiating power over royalty agreements.

Pandora

Pandora makes its money the same way radio stations do, from advertising that is inserted into the playlist. Estimates are that about half of its revenues are paid out in licensing fees.

Pandora's monthly active users (MAUs) were 58.9 million at the end of 2020, which was down from 63.5 million at the end of 2019. As of the end of 2020, Pandora had added 133,000 new paid subscribers to its Plus and Premium services, ending the year with nearly 6.3 million paid subscribers.10 Users have the option to use Pandora for free with limited advertisements or pay a premium for no advertisements.

In 2020, Pandora had a per-play royalty rate, at 0.00133 cents per play, according to Digital Music News. At that rate, the industry site notes, an independent artist would need more than 1.1 million plays to earn the U.S. monthly minimum wage of $1,472 according to their calculation.

Spotify

Spotify offers a free service with advertising and premium services. Since its inception in 2008, royalties have been Spotify's largest expense, accounting for about $9 billion since its launch.

The company once ranked as one of the industry's worst royalty payers, but it is steadily increasing its payments. Its per-play rate was between 0.003 and 0.005 cents in 2020 for most artists, according to Digital Music News.

Spotify's monthly active users (MAUs) were 345 million at the end of 2020, which was down from 271 million at the end of 2019. Premium subscribers (such as paid) grew to 155 million in 2020 from 124 million in Q4 2019.

Not surprisingly, artists have also witnessed stark decreases in album sales numbers due to the growth of streaming services such as Pandora and Spotify.

As technology has evolved, the landscape of the music industry has changed from radio broadcasts to mp3s, and now to music streaming services. Companies operating in the digital music space have witnessed large year-over-year growth due to paid subscriptions and on-screen advertisements.

Even though artists such as Drake and Lil Wayne each gross an annual rate of $3 million from Pandora alone, some artists say the system isn't fair.

As Pandora and Spotify continue their rapid expansion and revenue growth, we may see more artists follow Taylor Swift’s lead in bucking the current royalty model.

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How Pandora and Spotify Pay Artists in 2021

How Pandora and Spotify Pay Artists in 2021

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