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Is Spotify Underpaying Musicians?

Since Spotify’s release, there has been controversy over how much the company is paying its artists. Artists are outraged saying they are not making enough of profit from Spotify to even cover their recording costs.

Some artists have gone as far to say Spotify is no better than a legalized piracy site, because of their allegedly low pay rates. Some artists, especially independent ones, have told they see no difference between the fraction of a penny received per listen on Spotify and consumers just illegally downloading their music for free.

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Spotify officials beg to differ. Compared to other music sites, Spotify pays its musicians pretty well. Officials argue because the payment amounts are so small, it seems like these musicians are being paid a measly wage.

iTunes pays per song download, not per listen. Royalties are paid to the artist’s label for the download and nothing is paid to the artists for consumers to listen to the song. Spotify charges consumers per look, so those pennies start adding up pretty quickly. (more…)