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

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%

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