The MUSIC Industry Was Dying From Piracy—Then Streaming Saved It, Yet Musicians sTILL HATE on Spotify, what’s up with that?
The Misguided Hate Toward Streaming from “Artists”
It’s easy to hate Spotify.
They’re a giant tech corporation, why not?
Artists see the payout per stream, yes, fractions of a cent and it feels like a gut punch. It feels unfair. It feels like they’re being exploited by a system designed to reward the platform and leave them struggling. And on the surface, who could blame them for feeling that way? No one dreams of pouring their heart into a song only to see a few dollars trickle in from thousands of streams.
But here’s the truth: this outrage is based on nostalgia for an era that never really existed. The golden age of music sales wasn’t golden for most artists. And what many fail to realise is that, in many ways, streaming has liberated musicians more than it has shackled them.
Can you imagine what it was like being an artist in the 90s?
You had two choices: sign with a label and give away your masters, or remain independent with little chance of distribution beyond burning CDs at home. You couldn’t simply upload your music to a global audience. You needed connections, manufacturing, distribution deals, and radio play. Your fate was controlled by a select few industry gatekeepers who decided who got heard and who didn’t.
And before that? The 70s and 80s were even worse. Record deals were structured like predatory loans—labels owned everything, from your recordings to your image, and artists often found themselves in debt even after selling millions of records. Your favourite rockstars? Many of them were broke despite chart-topping success.
The problem is, we view the past with rose-coloured glasses and the present with a magnifying glass.
So before we declare Spotify the villain, we need to take a step back. We need to understand the reality of the music industry’s past, the economics of today, and the opportunities that streaming provides.
Because when we do? The truth becomes crystal clear: Spotify isn’t the enemy—it’s part of the evolution. And those who adapt, instead of resist, are the ones who thrive.
The Evolution of Music Sales: Understanding the Bigger Picture
Before we can judge streaming, we have to understand where we came from. The way artists have earned money has shifted dramatically over the decades, shaped by technology, industry power struggles, and consumer behaviour. Many argue that streaming devalues music, but what if we told you that music has always been controlled by forces far bigger than the artists themselves?

The Physical Era: 1950s – 1970s
Imagine pouring your soul into an album, spending months recording it, only for a record label to tell you that you’ll see just a fraction of the earnings—if you’re lucky. This was the reality for most musicians in the early days of recorded music.
During this time, the record companies held all the power. Vinyl, cassettes, and eventually CDs weren’t just music; they were expensive, physical products that required manufacturing, distribution, and retail placement. If you wanted your album in stores, you needed a label’s infrastructure. And the price of entry? Your masters, your royalties, your creative control.
Think about legends like Little Richard, Chuck Berry, and The Beatles—all of whom battled with exploitative record deals that left them with little financial gain despite their massive influence.
Can you imagine what it felt like to create a song that changed music history, only to see executives get rich while you struggled to pay your bills?
Fans paid top dollar for records, but did that mean artists made a fortune? Hardly. The bulk of that money flowed straight into the pockets of executives, leaving artists dependent on advances and brutal contract terms that left many in financial ruin, even after selling millions of copies.
The Power Shift: 1980s – 2000s
By the 80s and 90s, some artists had begun negotiating better deals. Superstars like Michael Jackson, Madonna, and Prince gained leverage to demand a bigger cut, but for most, the industry remained a rigged game. CDs were now the dominant format, and with them came even bigger profits, for the labels of course.
Think about it: fans were paying $15–$20 for an album, yet after costs, label cuts, and production expenses, most artists saw just a tiny percentage per sale. And if you were in a band? That money got divided even further.
Prince famously rebelled against this system, even writing “slave” on his face in protest of his contract with Warner Bros. Why? Because he, like many artists, realised that even the biggest names in music were still trapped in a system designed to benefit labels, not musicians.
Yet, there was no alternative. To have a career, you played by the label’s rules.
How do you think artists who weren’t superstars fared? If the biggest musicians in the world felt like they had no power, what chance did smaller, independent artists have?
The Piracy Era: Late 90s – Early 2000s
Then, almost overnight, everything changed.
The internet, once a promising tool for artists, became a nightmare for the industry. Napster, Limewire, torrents, flipped music’s value on its head. Suddenly, songs weren’t $15 per album. They were FREE. The labels panicked. Sales tanked. Artists who had finally started to see a piece of the pie watched their income vanish.
And the worst part? There was no clear solution. People weren’t going back to paying for CDs, and digital downloads (like iTunes) only provided a temporary fix. Music was now expected to be free.
Ask yourself, if you were an artist at this time, how would you have survived? How would you have convinced fans to pay for something they could get instantly for free?
Some bands, like Metallica, waged legal wars against Napster, but the damage was already done. The industry had to change or die.
The Digital Streaming Revolution: 2010s – Present
Enter Spotify.
Rather than fight the shift in consumer behaviour, streaming services embraced it. Instead of piracy draining artists’ revenue to zero, streaming provided a legal, monetised way for music to be consumed en masse.
The trade-off? Less money per play (perhaps, a little more about that below) —but infinitely more plays.

Today, an independent artist like Chance the Rapper can upload their song and have it instantly available to millions of listeners worldwide. No manufacturing. No middlemen. No need to beg for a record deal just to have a shot at distribution. The playing field isn’t perfect, but it’s more level than ever before.
Streaming didn’t kill the music industry, it saved it from the real villain: irrelevance.
Think about Billie Eilish. She recorded an album with her brother in a bedroom, uploaded it online, and became a global superstar. Could that have happened in the 90s? Absolutely not.
And that’s why, before we blame Spotify, we need to ask: Would you rather have a chance to compete, or be stuck in an industry where the barriers to entry were impossible to overcome?
Why Spotify Isn’t the Villain: A Reality Check
For years, streaming services, Spotify in particular, have been painted as the villains of the music industry. The argument is simple: “Spotify pays artists fractions of a cent per stream, so how could that possibly be good?” But this question is flawed because it lacks historical context, economic reality, and an understanding of consumer behaviour.
No One Is Forced to Use Spotify
Let’s start with a fundamental truth: no artist is forced to put their music on Spotify. There are alternative models—Bandcamp, direct-to-fan sales, Patreon, vinyl and CD sales. But the reality is, consumer behaviour has changed.
Can you imagine trying to convince today’s listeners to return to an era where they had to buy every album outright before hearing it? Streaming services didn’t force this shift—consumers did. Spotify just provided the most efficient solution to an inevitable problem: people weren’t going to return to paying $15 per album in a digital world.
Consider Tool, who famously resisted streaming for over a decade. Did it hurt their career? Not necessarily. But did it prevent them from being discovered by new fans who weren’t already die-hard followers? Absolutely. When they finally joined streaming platforms, their numbers skyrocketed overnight.
If Spotify is truly the villain, why do so many artists willingly use it? The answer is clear: because despite its flaws, the benefits outweigh the negatives.
The Cost of Making & Distributing Music Has Never Been Lower
Imagine being an artist in the 1970s. Recording an album was a massive financial risk. Studio time was expensive, manufacturing vinyl or CDs required a label’s infrastructure, and distributing music was a logistical nightmare. If you weren’t backed by a label, good luck getting your music heard beyond your local scene.
Fast forward to today.
- You can record an entire album in your bedroom for next to nothing.
- You can distribute it worldwide instantly through DistroKid, TuneCore, or CD Baby.
- You can market it yourself on social media, bypassing the old gatekeepers of radio and retail.

Take Steve Lacy as an example. He recorded his Grammy-nominated album entirely on GarageBand using his iPhone. No expensive studio, no label funding, just raw talent and accessible technology. Could an artist have done this in the 90s? Absolutely not. The playing field has changed, and streaming platforms allow artists like Lacy to reach millions without ever needing a major label’s backing.
Streaming isn’t just about how much you’re paid per stream, it’s about how much less it costs to be an artist today compared to previous generations. The barrier to entry has never been lower, and that’s thanks to technology, not labels.
Artists Make Money in More Ways Than Ever
Before streaming, if you weren’t getting a cut of album sales, you had very few ways to make money. But today? Streaming is just one part of an artist’s revenue stream, not the whole picture. Smart artists leverage streaming to fuel other income sources:
- Touring: Spotify helps build audiences worldwide, driving ticket sales.
- Merchandise: More listeners = more potential merch buyers.
- Sync Licensing: Streaming data is now used by music supervisors to discover songs for films, TV, and commercials.
- Patreon & Direct Fan Support: Some artists use Spotify to funnel fans into paid memberships.

Look at an artist like Russ, he used streaming to build a massive fanbase independently and now earns millions from touring and direct sales. Streaming is a tool, not a paycheck.
The Alternative to Streaming Was Worse
Many argue that streaming has reduced artist income, but they forget what came before it: piracy.
During the early 2000s, when Napster and Limewire ruled, artists made nothing from digital music. The industry was collapsing. Streaming, for all its faults, is the reason artists are earning anything at all from digital consumption.
Would you rather make fractions of a cent per stream or nothing at all? Because before streaming, millions of people were downloading music for free, and there was no monetisation structure in place.
Adapt or Be Left Behind
Is Spotify perfect? No. Could payouts be better? A little (more below). But blaming Spotify for artist struggles ignores a much bigger picture:
- Consumer behaviour changed, and streaming was the inevitable solution.
- Artists have more power and freedom than ever before.
- The alternative—piracy and industry gatekeeping—was worse.
Instead of resisting streaming, artists should learn to leverage it. Because in this era, success isn’t just about album sales. It’s about attention, engagement, and adaptability.
So the real question isn’t “Is Spotify fair?”—it’s “Are you using it to your advantage?”

The Economics of Streaming: Supply vs. Demand
One of the biggest criticisms of streaming is that artists get paid “too little” per stream. At face value, this seems like a fair argument—fractions of a cent per play doesn’t sound like a sustainable income. But this complaint often ignores a crucial factor: economics, specifically supply and demand.
Streaming didn’t just change how people access music—it changed how much music is available. And when supply skyrockets while demand remains relatively fixed, the value of an individual unit naturally decreases.
The Economics of a CD vs. Streaming
Let’s break down the numbers.
- CD Era: In the 90s, an album cost around $15. An artist, after label cuts and expenses, might take home $1-$2 per CD sale. But let’s put that into perspective:
- The average CD had 10 songs.
- A dedicated fan would likely play the album at least 100 times.
- That means the artist’s earnings per song was $0.10 – $0.20 per song per CD sold.
- Per play, that breaks down to just $0.001 – $0.002 per play—one-tenth of a cent.
So while the $1-$2 per CD might sound better than today’s streaming payouts, the per-play earnings were nearly identical to what artists receive from streaming today.
The reality? Streaming doesn’t inherently devalue music—it values engagement over one-time purchases. Fans engaging with an artist’s music over a lifetime can actually generate more revenue than a single CD sale ever could.

The Explosion of Music Supply
Here’s something most people don’t consider: there is more music available today (in fact its a bucket load more) than at any other point in history.
- In the early 2000s, roughly 500,000 songs were released per year.
- In 2024, over 100,000 new songs are uploaded to Spotify every single day.
That’s 36.5 million songs released annually—a 7,200% increase in supply compared to just two decades ago.

The result? The market is oversaturated. Artists aren’t competing for dollars anymore—they’re competing for attention.
Would artists from the past have preferred a world where they had direct access to fans but had to fight for visibility? Or a world where they needed a label’s approval just to be heard?
Streaming Is Built for the Attention Economy
We live in an era where consumers are bombarded with endless entertainment choices—music, movies, social media, gaming. Spotify’s algorithm is designed to surface what keeps people listening, not just what’s popular. That means artists who understand how to game the system—consistent releases, playlist placements, algorithm-driven discovery—are the ones who win.
Consider this: Lil Nas X used TikTok and streaming algorithms to turn a song recorded for $30 into a global hit. The tools exist. But success in the streaming era requires a different mindset.
The Pie Has Grown, But So Has the Competition
Here’s an undeniable fact: more artists are making money from music today than ever before.
- In the CD era, only a few thousand artists made a living, and very few crossed the $1 million annual earnings mark—typically those signed to major labels with significant radio play and album sales.
- Today, over 1,250 artists generate more than $1 million from Spotify alone each year. Notably, over 1,000 of them didn’t have a single song in Spotify’s Global Top 50, proving that sustainable earnings are not limited to only the most mainstream artists.

Yes, individual payouts may seem lower (perspective above). But that’s because music is no longer a scarce resource controlled by a handful of gatekeepers—it’s an open playing field. Streaming in combination with social media, democratised the music industry.
How Artists Can Win in the Streaming Era
The streaming era has changed the music industry forever, but instead of resisting it, smart artists are learning how to leverage it. Success today isn’t about selling records, it’s about building an audience, engaging with fans, and maximising multiple revenue streams. The artists who adapt are thriving. The ones who don’t? They get left behind.
The Power of Playlists & Algorithmic Discovery
Spotify and other platforms are no longer just distribution channels, they are discovery engines. Playlists like “Discover Weekly” and “Release Radar” help fans find new music without radio or label intervention.
- Key Strategy: Getting featured on editorial and algorithmic playlists can exponentially increase an artist’s exposure.
- Album Release Strategy Has Changed: Instead of dropping full albums all at once, artists now follow a drip-feed strategy, releasing singles consistently to maintain algorithmic momentum.
- Case Study: Bring Me The Horizon has successfully adapted to this model, releasing songs individually over time instead of traditional album drops, ensuring constant engagement and higher streaming numbers.
- Action Step: Focus on metadata, consistent song releases, and optimising song length and engagement metrics to increase playlist chances.
Direct-to-Fan Strategies: Building a Community
Artists today aren’t just musicians; they’re brands. Streaming is just the top of the funnel—what matters is turning passive listeners into active supporters.
- Engagement First: Use platforms like Discord, Instagram, and Patreon to build a fanbase.
- Superfans Matter: Research shows that 1,000 dedicated fans can sustain an artist’s career if monetised properly.
- Example: Amanda Palmer has built a massive direct-to-fan support system via crowdfunding and Patreon.

Touring, Merch, & Hybrid Monetisation Models
Streaming revenue alone isn’t enough for most artists, but it plays a key role in driving ticket sales and merchandise purchases.
- Streaming as a Marketing Tool: Playlists introduce new fans who then buy tickets, merch, and experiences.
- Data-Driven Touring: Spotify’s Fan Insights tool helps artists pinpoint the best cities to tour based on listener data.
- Example: Billie Eilish’s early career success was fueled by viral Spotify plays, which led to a massive touring audience.
Mastering the Business Side: Ownership & Diversification
One of the biggest advantages of the streaming era is that artists no longer need major labels to succeed, but they must understand the business side of their careers.
- Own Your Masters: Independent artists make more per stream than signed artists who split royalties with labels.
- Multiple Revenue Streams: Sync licensing, brand partnerships, NFTs, and YouTube monetisation can supplement streaming income. (Don’t sleep on Youtube, its the most popular discovery platform)
- Case Study: Chance the Rapper turned down label deals, used streaming and direct-to-fan sales, and built a multi-million dollar independent empire.
Putting Spotify Under the Economic Microscope
Artists often argue that Spotify isn’t paying them fairly, but what does the platform’s financial picture actually look like? To understand what’s fair, we need to examine how much money Spotify generates, how it distributes that revenue, and whether it’s even a profitable company.
How Much Money Does Spotify Make?
Spotify’s revenue comes primarily from two sources:
- Premium Subscriptions: Users pay a monthly fee for ad-free music and additional features.
- Ad-Supported Free Tier: Brands pay for ad placements, and Spotify generates revenue from ad impressions.
- In 2023, Spotify generated approximately $13.2 billion in revenue.
- 85% of that revenue came from paid subscriptions, while 15% came from ads.
At face value, this sounds like an enormous sum, so why can’t it pay artists more? That leads us to how this revenue is divided.

Where Does Spotify’s Money Go?
Of the billions Spotify earns, the money is split across multiple areas:
- ~70% of revenue is paid out to rights holders. This includes record labels, publishers, and distributors. Who then pass a portion of the revenue to artists.
- 30% of revenue covers Spotify’s operational expenses, including:
- Technology & Infrastructure: Servers, cloud storage, and content delivery networks to ensure seamless streaming.
- Employee Salaries & Operations: Spotify employs over 10,000 people worldwide, handling engineering, licensing negotiations, marketing, and legal compliance.
- Marketing & User Acquisition: Advertising, partnerships, and promotional campaigns to grow and retain its subscriber base.
- Research & Development: Innovation in AI-driven recommendations, new product features, and platform enhancements.
- Licensing Negotiations & Legal Costs: Ongoing negotiations with record labels and publishers, along with legal fees to comply with global copyright laws.
Spotify doesn’t directly pay artists, it pays labels and distributors, who then pay artists based on their contracts. This means that signed artists often see only a fraction of their streaming royalties.

Is Spotify Even Profitable?
Despite its massive revenue, Spotify has struggled to turn a consistent profit.
- In many years, the company operated at a loss, reinvesting revenue into platform growth.
- High licensing costs mean that Spotify’s margins are razor-thin compared to other tech giants.
- It only recently started reporting small profits, proving how difficult it is to sustain a business model where 70% of revenue immediately goes to rights holders.
This raises an important question: If Spotify isn’t even making huge profits, how can it afford to pay artists more?
What’s Fair? Understanding the Bigger Picture
Let’s put things into perspective:
- Streaming has made music more accessible than ever, but it operates on thin margins.
- Labels and publishers receive the majority of artist payouts—not Spotify itself.
- If Spotify increases artist payouts, it would either have to raise prices (risking user loss) or cut operational costs (which could hurt platform quality).
Instead of blaming Spotify alone, artists should ask: Are labels paying them fairly? Are they maximising all their available revenue streams? Because streaming isn’t just about per-stream payouts—it’s about visibility, audience growth, and long-term sustainability.
Spotify’s Reality Check
Spotify isn’t a bottomless money pit, it’s a business balancing consumer expectations, licensing costs, and industry politics. While it can and should improve artist compensation, the root issue isn’t Spotify alone. It’s how the entire industry monetises music in the digital age.
Understanding Spotify’s economic reality allows artists to make smarter decisions, not just in what they demand from the platform, but in how they build sustainable careers beyond streaming alone.
The Real Problem: Outdated Industry Thinking
It’s easy to blame streaming services for the financial struggles of artists, but the truth is the music industry itself has been slow to evolve. Many of the issues facing musicians today are the result of outdated business models, rigid contracts, and a mindset that refuses to adapt to new realities.
The Labels Still Hold the Power
For decades, record labels controlled the music industry. Even in the streaming age, they continue to take the biggest share of artist revenue.
- Major labels negotiate licensing deals with Spotify and other platforms, taking a significant percentage before artists ever see a dime.
- Most artists signed to labels only receive a fraction of the streaming revenue that is allocated to them.
- Legacy contracts from the pre-streaming era often still apply, keeping artists tied to outdated royalty structures.
Labels have adapted, but only to protect their own profits, not to create fairer deals for artists.
Rethinking Streaming Payout Models
The current pro-rata streaming payout model, where all revenue is pooled and distributed based on total streams—operates on the economics of volume. This benefits superstar artists and major labels who dominate streaming numbers, while smaller and mid-tier artists see a much smaller share of the pie.
But is there a better way to divide streaming revenue? Here are a few alternative models that have been proposed:
- User-Centric Payment System (UCPS): Each user’s subscription fee is distributed only to the artists they actually listen to, rather than going into a general pool. This could create a more equitable payout system, benefiting independent and mid-tier artists.
- Tiered Payouts Based on Engagement: Streams could be weighted differently based on user behaviour. For example, a song that is played once gets a lower payout than a song repeatedly streamed over time, rewarding deeper fan engagement.
- Revenue Sharing Directly from Subscriptions: A portion of a user’s subscription could be directly allocated to their most-listened artists, creating a more direct financial relationship between fans and musicians.
- Hybrid Model: A combination of pro-rata distribution and direct artist support, balancing discovery-based payouts with direct listener-to-artist compensation.

Each of these models has its own challenges, but they offer a glimpse into how streaming could evolve to be fairer for a wider range of artists.
Instead of clinging to the current model just because it’s the norm, the industry needs to be open to alternative payout structures that reflect modern music consumption habits.
Resistance to New Revenue Models
Many in the music industry have resisted change, failing to fully embrace new ways for artists to monetize their careers.
- Direct-to-fan platforms like Patreon, Bandcamp, and NFTs have allowed artists to break free from traditional gatekeepers, yet many industry executives downplay their importance.
- Crowdfunding, brand partnerships, and subscription models provide alternative revenue streams, yet labels continue to push artists toward outdated album cycles.
- Forward-thinking independent artists are proving that success doesn’t have to rely on old-school industry structures—but many still feel trapped by them.
The Industry’s Focus on Hits Over Sustainability
The modern music industry rewards virality over longevity. Labels and executives chase short-term success rather than helping artists build sustainable careers.
- TikTok, viral trends, and playlist placements have become the primary drivers of success.
- Labels invest heavily in short-term hype but don’t always provide long-term artist development.
- Many promising artists are dropped when they fail to meet streaming benchmarks, rather than being nurtured over time.
This creates a culture where artists are pressured to constantly produce viral content, rather than focusing on creative growth and long-term fan engagement.
The Industry Needs to Evolve
The real problem isn’t just streaming—it’s that the industry still operates under a business model that no longer fits today’s digital economy.
- Labels need to modernise their deals and give artists a fairer share of revenue.
- Streaming services should explore alternative payout structures that better support mid-level and independent artists.
- Artists should take ownership of their careers, leveraging direct-to-fan models and diversified income streams.
The future of music doesn’t belong to those clinging to outdated models, it belongs to those who adapt. And the sooner the industry realises that, the better it will be for artists everywhere.