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Spotify is devastating to small artists

Spotify Royalty Payments Criticism

The impact of Spotify on artists has been a hot topic in the past year. Another grim new data point comes from Finland, where one of the most popular artists of the country has released detailed statistics about his streaming royalties. “Levoton tyttö” was one of the biggest summer songs in Finland, topping 1 million Spotify plays by June. The artist, Anssi Kela, received precisely €2,336.90 (USD $3,159.72) in royalties for his blockbuster song. That is the consolidated number from all streaming services, though Spotify dominates the Nordic region.

This was his biggest hit in a decade. Much has been made of the woes of major global stars who are livid about Spotify’s royalty rates. But the people Spotify and other streaming services really end up slamming are niche acts or artists in small countries. These singers and bands used to make a living by selling 100,000 or 200,000 copies of their biggest hit albums or singles and touring heavily. Royalties paid for digital downloads are far below what artists used to make per single or album. But streaming is an ever rawer deal.

The only way to leverage Spotify to create a meaningful chunk of annual income would be to hit 50 million or more plays annually. And that would yield $50,000 a year — roughly what an average insurance underwriter or a librarian makes in the United States.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.