If you release music through a distributor, you've probably heard that Spotify pays around $0.003 to $0.005 per stream.
That range gets repeated constantly. But there is no fixed per-stream rate. And for many independent artists, the real number ends up lower than the headline figure suggests.
I spent 10 years working in music distribution, helping thousands of artists with releases, royalties, disputes, and takedowns. Over time, I started looking less at what streaming “pays” and more at what it actually costs artists to participate. That gap is where the real story is.
How Spotify royalties actually work
Spotify does not pay a set rate per stream.
Each month, it pools subscription and ad revenue. Roughly two-thirds to 70% of that revenue goes into the royalty pool. That pool is divided based on each rights holder's share of total streams for that month.
What you earn per stream depends largely on:
- Listener subscription tier (premium vs free)
- Listener geography
- Currency exchange rates
- Your distributor's fee structure
- Your label split, if any
Streams from premium subscribers in high-revenue markets like the US, UK, or Germany are worth more than streams from free-tier listeners or lower-ARPU markets.
Estimates often cited publicly:
- US premium stream: roughly $0.004 range
- Free-tier stream: often closer to $0.001–$0.002
- Some lower-revenue territories: under $0.001
Blended across a global audience, many independent artists land around $0.0025–$0.0035 per stream.
That means $0.003 is a realistic planning number for a lot of indie releases. The $0.005 figure assumes a heavily premium, high-income listener base.
What it takes to break even on distribution
Most distribution services cost somewhere between $20 and $50 per year for a basic plan.
At $0.003 per stream:
- $20 fee → ~6,700 streams
- $30 fee → ~10,000 streams
- $40 fee → ~13,300 streams
- $50 fee → ~16,700 streams
That's just to recoup distribution.
It does not include recording, mixing, mastering, artwork, marketing, session players, or your time.
And while exact median numbers vary by dataset, the majority of tracks uploaded to Spotify never reach 10,000 streams in a year. Many never reach 1,000.
The 1,000-stream threshold
In 2024, Spotify introduced a policy change: tracks must receive at least 1,000 streams in a rolling 12-month period to generate recorded royalties.
Tracks below that threshold earn nothing for that period. The royalties that would have gone to those tracks are redistributed into the overall pool.
Spotify stated that sub-1,000-stream tracks represented around 0.5% of total streams. However, a much larger percentage of tracks on the platform fall below that threshold.
Because Spotify now hosts well over 100 million tracks, even a small percentage of total streams translates into a large number of affected recordings.
For artists with niche, catalog, classical, jazz, or regional material, the impact can be significant. Songs that once generated small but real royalties may now generate zero.
Promotion risk and tradeoffs
Low streaming numbers push artists toward promotion. But promotion on streaming platforms comes with tradeoffs.
Artificial stream penalties
Spotify and distributors actively monitor for artificial streaming. If a track is flagged for suspicious activity, distributors may charge penalties or remove the release. In some cases, repeated violations can lead to takedowns or account issues.
Artists can sometimes be caught in this system without knowingly purchasing fake streams, particularly if placed on questionable playlists. Appeals are possible but can be slow.
Discovery Mode
Spotify's Discovery Mode allows artists and labels to opt into increased algorithmic exposure in exchange for a lower royalty rate on streams generated through that feature. The discount is reported to be around 30% on those specific streams.
It is not a cash payment, but it reduces the royalty rate on those plays.
In short, visibility often comes at a cost.
The bigger picture
For a typical independent artist:
- You pay $30–$50 per year to distribute.
- You need 10,000+ streams just to cover that fee.
- Tracks under 1,000 annual streams earn nothing.
- Promotion carries risk or reduced royalty tradeoffs.
Meanwhile, streaming platforms have raised subscription prices in recent years, and overall company profitability has improved. But per-stream payouts fluctuate based on total revenue and total streams. They do not automatically rise with subscription price increases.
Streaming is not going away. It's essential for discovery. Being on Spotify, Apple Music, and others matters.
But streaming alone is rarely a sustainable revenue model for independent artists.
A different layer: direct support
This is the problem I watched compound for a decade.
Gatefolded is built around a simple idea: give artists a place where the economics are direct.
For $49 per year, you can:
- Create a full artist profile
- Upload unlimited albums and tracks
- Add cover art, lyrics, and credits
- Password-protect unreleased music
- Link out to all streaming platforms
- Accept fan tips with no platform fee
- See who's listening and how
Here's the math:
At $0.003 per stream, a single $5 fan tip equals more than 1,600 Spotify streams.
Direct support doesn't replace streaming. It complements it.
Streaming is for discovery.
Direct connection is for sustainability.
Your music shouldn't live only inside an algorithm.
It should have a home.