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State of the Screens

After Driving Streaming Music’s Rise, Spotify Aims to Cash In

By April 9, 2018No Comments

Big news: Spotify went public last week and is currently valued at $27B!

How Spotify makes money:
1) Subscriptions — 90%
2) Advertising — 10%

Spotify currently has 157M users around the world.

Types of users (% of total):
1) Non-paying — 86M (55%)
2) Paying — 71M (45%)

Big news: The music industry just finished the best year in a decade with $8.7B in revenue w/ streaming accounting for 65%.

Streaming revenue by year (% growth):
1) 2014 — $1.8B
2) 2015 — $2.3B (↑ 28%)
3) 2016 — $4.0B (↑ 74%)
4) 2017 — $5.7B (↑ 43%)

Flashback: Nielsen 360 Study Finds Consumers Love Streaming Music, But Radio Still Strong

How artists make money: Spotify accounts for 48% of streams and pays out ≈ $0.004 per stream ($3.97 per 1,000 streams).

Below is a breakdown by label type:

Flashback: Inside The Weeknd’s $92 Million Year — And The New Streaming Economy Behind It

Streaming revenue for Forbes Celebrity 100:
1) 2015 — $177m
2) 2016 — $387m (↑ 119% YoY)

More: The odds of an artist becoming a ‘top tier’ earner on Spotify today? Less than 1%

Share of revenue for top artists:
1)
Top 0.005% — 8%
2)
Top 0.05% — 32%
3) Top 0.25% — 58%
4) Top 0.45% — 69%
5) Top 2.45% — 89%
6) Bottom 98% — 11%

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.