Phenomenal listening powers! (Itty bitty payouts to artists.)
How well does Spotify work for musicians?
Actually, pretty badly.
Zoë Keating, a cellist, composer, and occasional Radiolab guest, has released into a public Google Doc how much money she made from Spotify between October 2011 and March 2012. Spotify pays per listen, so every time someone plays one of Keating's songs on the service, she earns a tiny chunk of money.
Between October and March, Keating's songs were played 72,800 times on Spotify.
For all those listens -- those hours upon hours of music -- she earned $281.87. Every time someone listened to one of her songs, she made, on average, three tenths of a cent*.
Those numbers are roughly equal* to what was thrown around last year, when Spotify prepared to launch in the US. David Harrell, writing on his blog Digital Audio Insider last July, claimed to make, on average, more than two tenths of a cent per listen.
Spotify requires all musicians to work through a label, and both Harrell and Keating used the label-like-company CD Baby, which aggregates indie music to online services. Spotify, though, doesn't treat all labels equally. Keating writes in notes attached to her Google Doc:
Spotify does not pay the same per play to Indie rights holders as it does to Major labels. Majors are shareholders in Spotify and their deals are confidential. That matters to me, but doesn't seem to matter to others.
In the same notes, Keating explains her thoughts on Spotify:
I think Spotify is awesome as a listening platform. In my opinion artists should be view it as a discovery service, rather than a source of income. [...] I wish Spotify would do more to facilitate the connection between listeners and artists -- i.e show that the artist is playing nearby, or add links to buy music. It's early days, so maybe this will happen eventually. [sic]
Unlike Spotify, iTunes doesn't require that artists work through a CD Baby-like label, and Keating sells some of her music there by herself. During the same period of time -- October 2011 to March 2012 -- Zoë Keating made, from iTunes, after CD Baby took its cut, $46,477.77.
* This post has been updated to fix a math error: It originally claimed Keating made three thousandths of a cent when she had in fact made three thousandths of a dollar or three tenths of a cent. This, in turn, affected the next paragraph's analysis, which said this was "much, much lower" than estimates from last year. Both paragraphs above have been corrected. Props (and many thanks) to commenter Mark Whitfield and Twitter user @WigglyTendrils for noticing the error.