In effect, yes. Given that ~70% of revenue goes to rights holders, making the amount of revenue bigger by not paying 30% of subscriptions to Google, the savings are passed on to rights holders.
It’s net revenue split to rights holders according to the share of streams. If you have 1% of all streams on Spotify in a given time period, you get 0.7% of net revenue for that period.
How the rights holders distribute the money onward to the artists is not exactly transparent though.
…I mean, 30% of the savings go to Spotify, so some part of it will indeed go to stock buybacks and executive salaries. Some of it will go to regular employee salaries, and some of it will go to pay for technical infrastructure, and some of it will go to pay for offices. Some of it will be spent on marketing, even.
Spotify announced stock buybacks in 2021 that were greater in total that they most likely will pay artists in that same timeframe. Doing so artificially depresses the the amount of their revenue that’s counted as profit, which is what they use to calculate artist royalties.
Again, not true - the royalty payments are based on revenue, not profit.
To understand how absurd the claim that royalty payments are based on profits is, consider that Spotify has had a grand total of two profitable quarters throughout its whole existence - are you seriously claiming that no artist ever got paid outside those two quarters?
In effect, yes. Given that ~70% of revenue goes to rights holders, making the amount of revenue bigger by not paying 30% of subscriptions to Google, the savings are passed on to rights holders.
So, not exactly to the artists. I get the impression you seem to know quite a lot about the deal, can you try to analyze how this 70% gets divided?
https://support.spotify.com/us/artists/article/royalties/
It’s net revenue split to rights holders according to the share of streams. If you have 1% of all streams on Spotify in a given time period, you get 0.7% of net revenue for that period.
How the rights holders distribute the money onward to the artists is not exactly transparent though.
I suspected that much, it must be a complicated matter with many different cases, considering how music is produced. Thank you for your insight.
Any time.
To be clear, I don’t think this should be taken as a defense of Spotify. I just think that these misconceptions distract from more valid criticisms.
Nah the savings are probably being mostly passed on to stock buybacks and executive salaries
…I mean, 30% of the savings go to Spotify, so some part of it will indeed go to stock buybacks and executive salaries. Some of it will go to regular employee salaries, and some of it will go to pay for technical infrastructure, and some of it will go to pay for offices. Some of it will be spent on marketing, even.
70% of it will go to rights holders, though.
Spotify announced stock buybacks in 2021 that were greater in total that they most likely will pay artists in that same timeframe. Doing so artificially depresses the the amount of their revenue that’s counted as profit, which is what they use to calculate artist royalties.
https://techcrunch.com/2021/08/20/spotify-to-spend-1b-buying-its-own-stock/
Again, not true - the royalty payments are based on revenue, not profit.
To understand how absurd the claim that royalty payments are based on profits is, consider that Spotify has had a grand total of two profitable quarters throughout its whole existence - are you seriously claiming that no artist ever got paid outside those two quarters?
Thus could mean that 69% of revenues go to rights holders A and B and 1% of revenues are spread between holders C - Z.