Spotify is paying $310 million to Barcelona for funding. By our calculations, that’s more than the royalties paid to an artist.

MBW Reacts is a series of short commentaries by the MBW team. They are our ‘quick’ reactions – through the lens of music – to major entertainment news stories.

Spotify officially announced yesterday (March 15) that they have reached a 4-year main sponsorship agreement with Barcelona.

As is expected, the deal will see Spotify’s logo printed on the jerseys of the Spanish soccer/football giants from July 1 and even lead to the opening of the world-famous stadium, Camp. Nou, renamed Spotify.

In making the announcement, Spotify seemed particularly keen on assuring music artists that they’d get some nice benefits out of the deal.

Spotify and FC Barcelona will work together to create an opportunity for the iconic shirt to become a space that can celebrate artists from around the world,” Spotify said in a statement. a media releaseadds: “The vision of the partnership is to create a new platform to help artists interact with FC Barcelonaof the global fanbase. ”

However, we’ll have to see how the global artist community feels about the real story here: money.

According to sources, Spotify has finally agreed to pay $310 million USD for a four-year contract with Barcelona, ​​slightly less than $320 million which was previously discussed.

When we saw that $310 million figure in action this morning, MBW thought to itself: ‘Hmm. We wonder how many streams on Spotify would an artist need to earn such royalties? “

So we worked out.

According to the latest information “Bible of streaming pricing” published on The Trichordistaverage recorded music royalty payments per stream from Spotify for 2019-2020 is $0.00348.

It’s important before we go any further, let’s quickly clarify a few important things:

  1. Technically, there is no ‘per stream’ rate applicable to Spotify, as it famously distributes revenue on a proportional basis using ‘a big pot’ (whereby the artist/brand’s percentage of the total streams per month is equal to their percentage of the total royalties generated). However, a average rate per thread, calculated retroactively as The Trichordist over the course of a year, which is a fair measure of how much money each Spotify play earns;
  2. Spotify’s average per-stream ratio has changed over time, as Spotify has grown its freemium user base, launched new promotions, and entered new markets. For example, back in 2013 – when Spotify only had six million subscribers (!) globally – it The statement is pays about $0.007 per stream on its service;
  3. These figures do not include song/publish royalty payments, as a very as a general rule, covers between 10% and 15% of Spotify’s net sales (vs 52% -ish for recorded music royalties) for a certain period of time;
  4. As part of this article, we’re discounting the fact that all artists with music on Spotify have distributed that music through record labels or third-party distribution companies, who actually collect – and then take a contractual cut – royalties are paid by streaming the service.

So: Let an artist create $310 million Music royalties recorded on the Spotify platform – there $0.00348 average rate per stream – they will need to increase 89.08 billion VND play on service.

And here’s the thing: No artist in Spotify history has ever, across their entire catalog, garnered so many plays.

Based on ChartMastersThe most cumulative streams ever recorded by an artist on Spotify is Drake with 62.84 billion.

Of these streams, however, 17.57 billion VND are from tracks where Drake is only a featured artist (and therefore won’t claim most of the royalties).

On songs that Drake is leader artist, he must pull to date 45.27 billion VND stream on Spotify. And these streams, at an average rate of per-thread ($0.00348), will generate about 157 million dollars.

Even if we increase Spotify’s average copyright rate per stream in 2019-2020 of the Bible for streaming prices a bit (to account for the fact that historically it has sometimes been high) more) – increase it, such as $0.005 – an artist still needs to create 62 billion won streams (consisting of their own solo songs; not features) to gain $310 million payment number.

Its long and short: any way MBW cuts the numbers, Drake – the biggest artist ever on Spotify – doesn’t get $310 million with lifetime royalties from the foundation

Some more activities: You can add songwriting royalties to the tally… but we do know that Drake’s tune up to 21 musicians are enrolled eachand this will reflect relative (keyword: relative) small personal payments to Aubrey Graham in that business compared to his recorded music royalties.

You could also argue that Spotify paid an average royalty rate per stream earlier in Drake’s career than 0.00348 dollars. But we also know that just around 20% Drake’s total cumulative stream updates on Spotify were ranked in mid-2018, when he had 13 billion plays (features included) on the platform.

In mid-2018, Spotify’s average rate per stream fell 0.0033 dollars – actually lower more than that $0.00348 rate we have applied above.

So does Spotify get good value for $310 million is it pumping into the Barcelona deal?

More importantly, is the artist?

Spotify certainly thinks so. Alex Norström, Freemium Sales Manager, Spotify, said in a statement: “We couldn’t be more delighted to partner with FC Barcelona to bring the worlds of Music and Football together.

“Spotify”Their mission is to unlock people’s creative potential, help artists make a living with their art, and connect with fans… We believe this partnership creates many opportunities for real life. perform this mission. ”

Alex Norström, Spotify

“From July, our partnership will provide a global stage for Artists, Players and Fans at Spotify Camp Nou. We’ve always used our marketing investment to promote Artists, and this partnership takes this approach to new dimensions. We are happy to create a new opportunity to connect with FC Barcelonaworldwide fan base. ”

He added: “SpotifyTheir mission is to unlock people’s creative potential, help artists make a living with their art, and connect with fans. We believe this partnership creates many opportunities to fulfill this mission in unique, imaginative and impactful ways. ”

Lots of talk about the artists in that statement from Spotify’s Norström (and indeed in this article so far) but no mention of musician.

Like we were write about beforeThe news that Spotify could find a spare $310 million to make a deal like this with Barcelona can be quite difficult to swallow for those in the songwriting community, who have watched Spotify protest the raise. copyright to composers and publishers in the United States.

SPOT’s original appeal against US musician pay increases, like adjudicated by the Copyright Boardincludes years from 2018 to 2022.

But in October 2021, we know that Spotify is now also trying prevent musician online pay rate in the next 5 years (2023-2027).

In both cases (2018-2022; and 2023-2027), Spotify wants to keep US musicians well-paid 10.5% revenue from its services (with additional ‘fix’ deductions thrown in for later stage).Worldwide music business Spotify is paying $310 million to Barcelona for funding. By our calculations, that’s more than the royalties paid to an artist.

Fry Electronics Team

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