What could be more sin fronteras than music streaming platforms and their payment methods? The opaque ways in which artists get paid for streams do not stop at national borders (though it may vary a bit from country to country). Spotify’s latest attempt to make its royalty model a bit less opaque didn’t quite work out the way it planned. If you look at the music press at all, you probably saw Spotify’s Loud & Clear report and royalties guide. Instead of showing how generous Spotify claims to be, the documents sharpened the contrast between big‑platform micro-payment streaming economics and more artist‑centric alternatives like Bandcamp.
If you are a listener and you want your music, it may seem like an arcane, in-the-weeds problem – just give me my songs. But the payment systems can and do determine what you get to listen to and whether or not your favorite band keeps going. Here’s the skinny.
Spotify’s annual Loud & Clear report and royalties guide tried to “clarify” how streaming payouts work. In the 2025 report, it noted that it does not pay a fixed “per‑stream rate” but divides revenue according to “streamshare” – Spotify’s term for how it divides all of the month’s royalties among rightsholders each month (labels, artists, songwriters, etc). Instead of paying a fixed amount per stream, Spotify adds up all streams in a given market (for example, all plays in Mexico in November), then calculates what percentage of those total streams belong to each label, distributor, artist, or other rightsholders.
Spotify said that it paid over $10 billion to the music industry in 2024 under this system, and said nearly 1,500 artists generated at least $1 million in royalties that year. Even with this huge payout, Spotify became profitable in 2024, after many years of operating at a loss. And $10 billion is a lot of money to distribute to artists- plus Spotify says that half went to indie artists and labels.
That is all well and good. But these headline figures obscure how little most musicians receive under streamshare. There are 11–12 million artists on Spotify (only 14% of which have more than 10 subscribers), so there are a lot of artists who don’t make a million a year, or anything, under this system. If you are Taylor Swift or a major label, you do okay. If you are an emerging new artist, don’t quit your day job.
Enter Bandcamp, which announced that its Bandcamp Friday initiative will continue in 2026, with eight dates where the platform waives its revenue share so artists and labels keep nearly all of each sale. Since its launch in 2020, Bandcamp Friday has funneled well over $100 million directly to artists and labels in just a few dozen 24‑hour windows, on top of Bandcamp’s everyday model, where artists typically receive around 80 percent of each purchase.
What this boils down to is that Spotify’s “clarification” campaign is actually an attempt to legitimize its scale‑driven, investor‑friendly model, while Bandcamp Friday’s 2026 announcement doubles down on a fan‑powered, high‑margin model for creators.
Which means, dear reader, that even if you just want to listen to your music, the payment systems of streaming platforms affect you. That great band you heard last week at a local club may not bother to register for a platform, or may quit music altogether because they, you know, want to eat. Now, I understand that Spotify’s interface and features like playlists, credits, info on the artist, lyrics to some songs, and miniplayers are really cool. So for listeners, it is a tradeoff – Spotify’s reach and interface contrasted to Bandcamp’s higher payout to artists.
Of course, artists can be (and should be) on both platforms – actually, on as many as they can afford. However, knowing the difference between Spotify’s model and Bandcamp’s, I, for one, will be sure to stream my favorite bands on Bandcamp Fridays.
Patrick O’Heffernan
