A new campaign launched by Spotify called Loud & Clear aims to help artists and fans understand the economics of music streaming, and WordPlay T. Jay has dug into the info available to break down what Spotify has said so far.

On the Loud & Clear main page, Spotify says artists deserve clarity.

“This site aims to increase transparency by sharing new data on the global streaming economy and breaking down the royalty system, the players, and the process,” the site says. “Artists want the opportunity to make a living from their work. We want that, too: Although more artists than ever are finding success through streaming, we’re nowhere near done, and we’ll keep pushing to grow the industry.”

In the “Streaming Economy” link, Spotify says it has paid over $23 billion total to rights holders and $5 billion in 2020, up $1.7 billion in the last three years. Also in 2020, the company accounted for more than 20 percent of recorded music revenue, meaning its figures provide only part of the picture of the entire music economy landscape.

That said, from 2017-2020, Spotify reported the following figured for each earnings group:

• $1,000 per year — 89,700 in 2017 to 184,500 in 2020, up 105 percent

• $5,000 per year — 35,600 in 2017 to 67,200 in 2020, up 85 percent

• $10,000 per year — 22,900 in 2017 to 42,100 in 2020, up 80 percent

• $50,000 per year — 7,300 in 2017 to 13,400 in 2020, up 80 percent

• $500,000 per year — 950 in 2017 to 1,820 in 2020, up 90 percent

• $1 million and higher — 450 in 2017 to 870 in 2020, up 90 percent

Spotify also reports its royalties are calculated by what it calls “streamshare.” That process includes a royalty pool for each country in which Spotify operates. A rights holder’s number of streams each month is then divided by the total number of streams in that country’s market. So, if an artist received 1 out of every 1,000 streams in any given country, say Mexico, that artist receives $1 out of every $1,000 from the Mexico royalty pool.

Spotify says the pool is based on subscription and advertising revenues in each market.

This question mark about the royalty pools is what T. Jay is most interested in, as Loud & Clear seemed to be an opportunity for Spotify to be more transparent on some of those kinds of figures.

T. Jay, for example, looked at his own revenues in Mexico. He had 22 streams of the track “Someone Else’s Dream” in that market, not necessarily in one month, which equated to about 3 cents. This means in that market, he was being paid about .001 cents per stream.

“You have to look at your own data and draw your own conclusions, but in the grand scheme of things, the more streams you get, the better off you will be; but also, the more superstars there are in your market, the less likely you will be to have a high streaming rate,” T. Jay said.

A difficult part of being in a highly competitive market is that total number of streams is higher, which means smaller artists have to produce a higher number of streams than in a less competitive market.

The question is, how can Spotify work the algorithm to not downplay the amount of streams a smaller artist gets just because a big artists gets so many?

“Maybe we should rethink the way royalties work overall,” T. Jay said. “Spotify has worked to lower the amount of pirating music, but they should be a part of the monetary solution, too. Only 13,000 people are making a living wage ($50,000) on Spotify, so how can they be a better part of the solution and not the problem?”

For more about Loud & Clear, check out T. Jay’s video below.