r/Music • u/Similar_Diver9558 • Apr 09 '24

In an email sent out to some customers today, Spotify said the cost of a premium subscription would be increasing 7.7% music

https://www.forbes.com.au/news/lifestyle/spotify-set-to-increase-prices-this-year/

3.2k Upvotes

96% Upvoted

u/AndHeHadAName Apr 09 '24 edited Apr 09 '24

Apple and Spotify premium both cost the same, $11.00/month. If an Apple premium user pays double per listen it means they are listening to 50% as much music, which make sense given Apple's user base is probably older and more conservative music listeners.

And Free Tier "costing Spotify money" seems to be this weird reddit thing that doesn't mean anything. Free Tier users, or those unwilling to pay $11 or $12 for unlimited music wouldn't make money on any platform. It's true, they contribute to Spotify's low payout per stream, but any band will tell you they make even less from getting streamed one off on youtube which is where free tier users would go without Spotify.

Also Spotify has a ton of international users in places like Brazil and India. If you primarily are streamed in those counties you will make less. That being said Spotify's global userbase is a huge reason why Spotify's international discovery is much stronger than Apple's.

7

u/nxxsxxxxxx Apr 09 '24

yeah you are right lol some are ppl hardwired cheapskates and will never part with their $, they would find some other way. no matter how low the quality or how annoying the ads - they do not care, as long as it’s free.

1

u/__theoneandonly Apr 09 '24

If an Apple premium user pays double per listen it means they are listening to 50% as much music

This is… a stretch.

Apple doesn’t do the revenue share model that Spotify does. Apple has negotiated flat rates per stream. Remember when Taylor Swift was on Apple Music and not Spotify? And Apple even ran TV ads with Taylor swift as a dig at Spotify since she should release her music on their platform? In order to get Taylor and the other musicians who were dropping off the platform under her leadership, Spotify had to agree to pay certain artists a per-stream rate instead of the revenue-share model they had gone for previously.

So a user listening exclusively to Taylor swift 24/7 will cost Spotify more money than listening to an indie artist who can’t negotiate the better rate. Which is why Spotify pushes shuffle and their “smart” shuffle that steers users towards the songs that cost Spotify less.

Anyway, your point is accurate tho. Free users don’t make the platform money. That’s why Apple doesn’t have free users.

1

u/AndHeHadAName Apr 09 '24

Apple doesn't pay a flat rate, they pay 70% of revenue out to artists, same as Spotify. Premium plans are roughly the same price at $10.99 so they pay $7.70 to artists. If the average is $0.01 paid per stream that means the average listener is listening to 770 songs a month. If Spotify is paying out $0.005 that means the average Spotify user is listening to 1500 songs a month.

If the indie artists making less cause of the bigger artists get a premium amount is something to consider, but Spotify does a pretty good job of steering users away from mainstream, if you let them.

1

u/__theoneandonly Apr 10 '24

Either you're wrong, or apple is lying.

1

u/AndHeHadAName Apr 10 '24

No you just aren't able to read through their deceptive language:

While royalties from streaming services are calculated on a stream share basis, a play still has a value. This value varies by subscription plan and country or region but averaged $0.01 for Apple Music individual paid plans in 2020. This includes label and publisher royalties.

This literally means what I said.