Popular Australian musicians make less on streaming services like Spotify than you might think

Montaigne at Falls Festival, January 2020. Image: Matt Jelonek/Wire Image.
  • Seemingly successful Australian musicians make less money on music streaming services than you’d think.
  • Artists are estimated to be paid between $0.004 and $0.007 per stream of their music on Spotify.
  • For many mid-tier artists, making a living also means working full-time.

The Australian music industry contributes between $4 billion and $6 billion to the economy in an average year, according to estimates from Music Australia. With a number that large, you’d be forgiven for thinking Aussie artists are getting a fair slice of the pie. In many cases, they aren’t.

Since the birth of peer-to-peer (P2P) sharing platform Napster in 1999, music became a product you could download for free, and many people did so despite its illegality. While big artists like Dr Dre and Metallica sued over blatant copyright infringement, it simply devolved into a game of Whack-A-Mole, with similar services like Kazaa and Limewire filling the void left by those that were shut down – all eventually superseded by a P2P protocol known as BitTorrent which allows users to download entire discographies in a single file.

Founded in 2006 and launched in Australia in 2012, Spotify became one of the first services to offer a middle ground to artists and music fans. It pays artists per stream for their music and offers a platform to people who want to access music for free as long as they don’t mind being served ads in the process. Spotify Premium removes these ads and includes features like offline play for a monthly fee of $11.99.

While artists are paid for their music, the rate paid per stream is generally very low. It adds up for popular artists who garner millions of streams, but for those trying to make a name for themselves, the results are tiny. While factors like the listener’s country, the type of account they hold and the artist’s specific royalty rate (if they have one) all play a part, Ditto Music puts the average rate at around $0.004 per stream for Spotify, though others put it higher at $0.007. Factor in the cuts taken by labels and distributors and the final payout for artists is slimmer still.

With this in mind, it should come as no surprise that only around 16% of Australian musicians make more than $50,000 per year, with a fraction of that amount coming from streaming alone. The Music Network contributor, Nathan Jolly, using some rough maths, worked out that an Aussie four-piece band would need to be hitting around 632,656 Spotify streams every month just to hit the base Newstart levels of $500 a fortnight.

To put that number in perspective, the band would need to be doing better than the popular Australian artist Montaigne, who averaged 608,333 Spotify plays per month in 2019. Montaigne can be considered a successful artist by a number of measures – she’s often played on national radio, won an ARIA award for best breakthrough artist in 2016 and hit number 4 on the Australian music charts with her album Glorious Heights. Even with that impressive track record, the artist is estimated to have made just $46,634 from 7.3 million Spotify plays last year.

Of course, Spotify is only one piece of the puzzle. To get a full picture of an artist’s earnings, other streaming services like Apple Music, physical album sales, live performance fees and merch sales all need to be factored in. It’s also difficult to know how much of that money ends up in the artists’ pockets, as royalties are paid to the rights holders of the music, which is often a record label representing the artist.

Music distribution service Ditto Music created a royalty calculator which provides rough estimates of artist streaming earnings based on survey data. If we plug in Australian artists who made big money in 2019, it shows Dean Lewis made $4.7 million from 734.1 million Spotify streams, Tones and I made $3.1 million from 482.5 million streams, Angus & Julia Stone made $1.3 million from 208 million streams and Tash Sultana made $1.1 million from 165.7 million streams.

Making it big in the music industry requires a degree of good luck. After all, no one can truly know that the music they’re creating will resonate with millions of people around the world. When this is the case, how can a mid-tier artist or band make a living out of their passion? They have to be savvy.

For ARIA award-winning artist Clare Bowditch, it was about focusing on the business of her music, which can be a tricky concept to couple with the often emotional nature of art. Speaking on The Few Who Do podcast, she says she learned the ins and outs of marketing herself in the music business from other artists throughout her career.

While music is the nuts and bolts of being a musician, she stresses the importance of a strong work ethic when it comes to finding a way to turn that passion into a sustainable career, which is something she learned from her parents. “So I, like them, wanted to be able to contribute at least to be able to buy my own smokes you know,” she said on the podcast.

She now teaches young artists how to run their own operations via her enterprise, Big Hearted Business.

For anyone trying to make a serious go of music today, it almost always has to begin as a hobby – a fun way to pass the time with the hopes of it one day becoming successful enough to become a primary source of income. This is the reality for Sydney heavy metal band Totally Unicorn, who are known across the country for their energetic live performances.

“It’s a niche style of music and therefore our appeal to a wide audience is tricky,” guitarist Aaron Streatfeild told Business Insider Australia. “For a band like us, I think it would be naive to think we could make a living on a high volume of hits from streaming platforms. No doubt it would help, but I can’t see it making a significant difference financially.”

“For Totally Unicorn to make a living from the band, I think it really comes down to a mix of full-time touring – a high demand of our live gigs nationally and abroad, and streaming interest from the mainstream music industry.”

While he says the band is happy with maintaining what they have for the moment, it can be demanding when every member works full-time. “There are downsides, like dedicating most of our leisure time toward band activities: rehearsals, writing, booking tours, maintaining some sort of relevance with online content,” Streatfeild said.

On the other side of the coin, this leaves the band with a high level of artistic freedom, which is something that can become muddled when record labels and other external stakeholders get involved. “We write music we want to hear, without the stress of pandering to a target market,” he said.

“We also get the best of both worlds – getting to live a semi-touring band life for some parts of the year and enjoying our personal lives for the rest of it. Full-time touring bands work hard and at the sacrifice of personal relationships and regular living. We work real hard too, but the upside of our position is that we get a little from column A and B.”

While streaming services don’t make it easy for artists to make a living in the modern age, they’re certainly a better alternative to the rampant piracy of the early 2000s. Some argue that streaming – and even piracy – is beneficial in the long term for artists as it helps spread their music beyond their immediate market.

At the end of the day, it comes down to what the consumer is willing to pay, and while streaming services have hit a decent stride, it’s hard to argue that it is the fairer options for artists.

“You could argue the cost of music was an over-inflated fee before, at least streaming could become fairer, but the streaming rate offered currently doesn’t feed enough people at the table,” Rick Moreno of Duly Noted Records told humanhuman.

Business Insider Australia reached out to Spotify Australia to clarify its rates for local artists but were told the company does not divulge those figures. It did, however, provide links to initiatives helping artists during the coronavirus pandemic, including the COVID-19 Music Relief which connects listeners to various music-related charities open for donations.

There’s plenty of debate around what comes after streaming, with some even pointing to video games as a potential vector for artists to share and monetise their work. Either way, a nudge towards more financial support for creators would be welcomed by many in the industry.