A popular topic is how much money artist's make in streaming royalties and if it is a viable source of revenue compare to other avenues...cough merchandise cough. In our 2021 Year In Review we highlighted the average artist made 16x more per show in Gross Merchandise Sales than a year's worth of streaming royalties based on 2021 averages. How has that changed as summer comes to an end, and how does that impact your band's specific genre?
To start out, what does selling one band tee equate to in streams? Spotify pay artists on a scale based on 'popularity', averaging $0.004 per stream for all artists. Knowing the average band tee price is $35, selling one is equivalent to almost 9,000 streams.
But, hey, if you are being streamed millions of times then maybe streaming is a larger potential revenue stream than merchandise, right?
Sure, if you are in the top 0.17%. In 2020, Spotify had over 8,000,000 artists on their platform. Less than 185K of them made over $1,000 in royalties and less than 14,000 made over $50K. Meaning...
Only 2% Artists On Spotify Made At Least $1,000 in Streaming Royalties in 2020.
0.2% Artists On Spotify Made Over $50K.
Last year, the average artist made a little over $10K per show in Gross Merchandise Sales. Based on 2020 numbers published around Spotify, the average artist on their platform makes $625 a year in royalties.
In our 2021 Year In Review we highlight the average artist made 16x more per show in Gross Merchandise Sales than a year's worth of streaming royalties based on the metrics above. Knowing that not every artist makes $10K per show in merchandise sales, we wanted to break it down by venue capacity so you can see what applies to you and your band.
Small cap artists who averaged $2.1K per show make 3X more per show than a year in Spotify royalties (based on the royalty distribution average).
Even small cap artists make 3x more per show than a year's worth of streaming royalties.
Next time you want to support an artist, don't just listen to their music, check out their merch!
Avg. Yearly Streaming Revenue per artist = total royalties distributed to artists / total artists on their platform ($5B / 8M). Spotify published metrics can be found here regarding the total royalties distributed to artists in 2020 ($5B+) and the number of artists who made $1K+ and $50K+ in royalties. Click here for the number of estimated artists on their platform in 2020(~8M+). Our numbers are estimates and not official numbers from Spotify.