Spotify paid out over £9 billion to the music industry last year. So why do most artists earn less than a penny per stream?
Here is the brutal truth. Out of every £1 Spotify earns:
70p goes straight back to record labels.
Servers, staff, and tech eat the rest.
Spotify keeps roughly 26p in gross margin.
They make £15 billion a year and operate on a knife edge. Investors aren't buying today's profit; they are buying the bet that one day Spotify owns the relationship with 500 million paying subscribers.
The lesson: Revenue is vanity. Margin is sanity.
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