subscriptions and the other 9% from advertisements. Of the revenue it generates, Spotify keeps 30% and splits the remaining amount between licensing, music deals and paying to the artists.
[ Check out my playlist on Spotify]
Reports of artists being dissatisfied with their earnings have made rounds quite a few times. There’s only so much that Spotify can do about it though.
Spotify has 3 plans on offer
- The free version gives you unlimited ad-supported streaming, shuffle-only playback of songs on mobile, access to podcasts and videos. The web has access to on-demand access.
- The premium version for $ 9.99 (4.99 for students). It adds offline listening, removes ads and on-demand mobile access(Access to individual songs instead of just radios).
- The family version for $ 14.99 gives you 6 accounts (from a single country) effectively making it $ 2.5 per account. The restriction is that all family members should reside in the same address.
Soundcloud vs. Audiomack: Which music streaming service to choose?
Premium (and Family) plan also adds support for extreme (320 kbps) quality soundtracks.
An interesting thing Spotify does is to create a habit in the users to use on-demand access on the web and disallow them this feature on mobile devices. This with the combination of advertisements on both platforms drives a user towards the premium subscription.
Plus, you can drive down the cost of the subscription by upto 75% by subscribing as a family. Even if you only use 2 accounts, this gives you a 25% cost reduction.
This just makes sense. They have understood the psychology of their users well, it seems.
I can understand the repulsion you feel just by looking at this word. I feel the same too. But it is a necessary evil. It currently accounts for roughly 10 cents per dollar that Spotify makes.
Plus, not all Spotify advertisements are cringeworthy. I am cool with a 30-second ad every 15 minutes. The information below is taken from here.
- Branded Moments: Remind users of your brand at the correct moment. Brands can choose a moment they associate with and users get a 30 min uninterrupted music playback session for playing your video.
- Sponsored Playlist: Users will listen to playlists with the brand logo as the cover picture and will show/listen to ads from only the brand for the duration of the playlist.
- Sponsored Sessions: Similar to moments but with an extra engagement option when the user clicks on the clickable display unit to activate the 30-minute listening session.
- Video Takeover Everywhere: The one I hate. A full focus video ad to deliver undivided attention to the consumer.
- Audio: An audio ad giving the brand a 100% Share of voice, accompanied by a clickable display unit.
- Homepage Takeover: A full-width banner on the home screen.
- Overlay: A full-page image ad when Spotify comes back to focus after being minimized.
- Leaderboard: Banner ads. A 30-second ad in the size of 720×90 pixels.
- Branded Playlist: Self-explanatory, A playlist with the brand’s name on it.
- Advertiser Page: A full-blown webpage that can contain videos, images, audio, links, and text.
The plethora of options at avail is actually a very good way of attracting small and huge brands to find a way to advertise on this platform.
Engagement of 148 mins per day means plenty of opportunities for Spotify to make money.