UMAW Streaming Resources

Section 1:

The Problem with Spotify & Major Streaming Services

When streaming audio entered the US market in 2011, pioneered by Swedish company Spotify and then copied by Apple Music, Amazon Music and others, it avoided existing regulations previously passed by Congress for direct payment to recording musicians from existing digital networks. Currently, Spotify, Apple Music, Amazon Music and other “interactive” streaming platforms pay $0 directly to recording musicians, unlike prior forms of digital distribution such as satellite radio, internet broadcast, and even “non-interactive” streaming platforms like Pandora, all of which pay recording artists directly via non-profitSoundExchange.

As UMAW began publicizing in 2020 with ourJustice at Spotify campaign, streaming services pay royalties for recordings only to master rights holders – that is, record labels – and those royalties are outrageously low even as the platforms and major labels have made billions from this new system of distribution. Spotify controls the major share of the market and as a result has received the most scrutiny, but the same basic problems apply to all commercial streaming platforms.

Some facts about Spotify and streaming in general:

• Spotify’s pay per stream to record labels currently averages $0.0035 [see Liz Pelly, Mood Machine, Chapter 13]

• Even if an artist owns their masters, does not work with a record label or manager, is solo and owes no other musicians any share of their recording income, and therefore receives 100% of the per stream $0.0035 paid by Spotify for use of their recordings, it would take 714,286 monthly streams on Spotify to earn $15/hour living minimum wage. (In practice, musicians typically do not work entirely alone and generally share master rights with others, making even this calculation unrealistically high.)

• Streaming currently represents 84% of all recorded music income in the US,according to the RIAA. There are hardly any income streams left for recordings outside of streaming.

• In 2024, Spotify unilaterally decided to no longer account for any royalties to tracks that receive less than 1,000 streams per year.According to Luminate, this means that in 2025, 88% of all tracks on Spotify were demonetized and received no master rights payments.

These problems with streaming have created a crisis for working artists, who have been shut out from the benefits of this new technology even as they supply all its crucial content.

• Rate per stream is declining while Spotify's revenue grows. Update current per-stream rate is  $0.0035

• ARPU continues to fall — streaming devalues music as a commodity. In 2024 it was $5.08

• Algorithmic curation and Discovery Mode as modern payola — artists pay for visibility with lower royalties.

• Spotify's legal battles against the CRB to reduce songwriter mechanical royalty rates.

• The Living Wage calculation: at $15/hr, how many monthly Spotify streams does one band member need? 714,286