Spotify takes 30%; the rest is distributed somewhat in proportion to what you listen to. Really small payouts (like $1) don't happen because they opened the floodgates for streamcount fraud (ppl just faking streams on fake artists - yes, that's a thing) while making absolutely no difference to regular small artists.
The distribution among all artists isn't equal but the result of very complicated licensing deals with the various major labels. The deals change every year, and the parties negotiate super hard. It's quite common for a deal for, say, 2023, to only be finalised in November 2023 - i.e. 11 months late. It's ridiculous but that's how it is.
Most of the complexity behind the payouts stems back to the special treatments the three majors want for their artists. After all, they need something special to offer to their roster. And since they have the most important artists, they have the negotiating power to pull this stuff off.
Stream share in aggregate. If I pay $14 a month and listen to Chesney’s “I am the one and only” 100 times in that month he should get $10 and Spotify $4.
That’s not what happens.
What’s the benefit in me listening to a fake artist that is me? I would get $10 back for the $14 I spend. Seems like a lot of effort to go to.
You could argue that as Chesney has a label that’s upto him and his rights holder. Fine. What about Dave Smith , my local crooner down the pub. If all I listen to is him why doesn’t he get the $10?
The distribution among all artists isn't equal but the result of very complicated licensing deals with the various major labels. The deals change every year, and the parties negotiate super hard. It's quite common for a deal for, say, 2023, to only be finalised in November 2023 - i.e. 11 months late. It's ridiculous but that's how it is.
Most of the complexity behind the payouts stems back to the special treatments the three majors want for their artists. After all, they need something special to offer to their roster. And since they have the most important artists, they have the negotiating power to pull this stuff off.
Source: worked at Spotify in the content team.