Spotify Is Paying Too Many Artists — And That’s Why No One Can Make a Living

How a 250,000 listener threshold could save music's middle class.

Spotify should not pay royalties to artists until they reach a threshold of 250,000 monthly listeners.

Not because artists don’t deserve money — but because the current system is quietly killing the middle class of music. Let’s be clear, any artist that can consistently hold an audience of above 250k listeners should be able to make a modest living from their music.

The Problem No One Wants to Say Out Loud

Spotify currently pays everyone.

And that’s exactly why it pays almost no one meaningfully.

Millions of tracks earn pennies.
Millions of artists receive payouts so small they change nothing.
The money is spread so thin that even artists doing “well” can’t live on it.

This isn’t about “being fair”, this is basic economics: dilution.

When everyone gets paid, no one gets paid enough.

The Streaming Math Is Brutal

I’m done with stats like “0.X% of artists make a livable wage.”

Are we really treating everyone who uploads a track to Spotify as a working professional in the same economic category?

Let’s ground this in reality.

Spotify pays, on average, $0.003–$0.005 per stream.

That means:

• 50,000 streams ≈ $200

• 100,000 streams ≈ $400

• 250,000 streams ≈ $1,000

• 1,000,000 streams ≈ $4,000

That’s before distribution fees, label splits, producer points, and songwriter splits.

So when people argue that removing payouts under a certain threshold “harms small artists,” the truth is actually this simple:

Those payouts already don’t matter.

They don’t fund growth.
They don’t change behaviour.
They don’t create sustainability.

They aren’t enabling small artists to make a living.

Why 250,000 Listeners Is the Right Line

If the goal is to rebuild a middle class of artists, the bar needs to represent real audience demand.

At 250,000 monthly listeners, an artist has:

• Fans that are coming back to stream their music

• Algorithmic traction

• Playlist adds (editorial + users)

• An audience beyond friends, bots, or passive discovery

This is the point where a catalogue stops being “uploaded” and starts being consumed.

Below that level, streaming is still in it’s discovery phase.
Above it, streaming becomes business.

What Happens If Spotify Sets a 250K Threshold

Here’s the proposed model:

• No royalty payouts until an artist reaches 250k monthly listeners

• Once it does, payouts begin immediately

• All royalties generated below the threshold are redistributed to those above it

• Per-stream payouts increase for artists who clear it

Spotify’s total payout pool is not reduced. Instead, it’s more concentrated towards artists who are gaining real traction.

Instead of millions of artists earning nothing, fewer artists earn something real. The result would be a mid-tier of musicians who can actually sustain themselves on recorded music.

This Is How You Save the 250K–5M Stream Artist

This is the group the current system is actively destroying.

Artists doing:

• ~300K streams

• ~750K streams

• ~1.5M streams

• ~3–5M streams

These artists:

• Have real fans

• Tour small to mid-size rooms

• Invest in marketing and a team

• Release consistently

• Build real momentum

And yet they still can’t live off streaming.

Why?

Because their royalties are being siphoned into millions of tracks that will never be marketed, toured, or scaled in any meaningful way.

Under a 250K threshold model:

• Per-stream payouts rise

• Streaming becomes a meaningful source of revenue

• Artists doing 1–5M streams could see 2–3x income increases

• The “almost there” tier actually survives

That’s how you rebuild a middle class.

What About Artists Under 250K Streams?

Here’s the uncomfortable truth:

Any artist under 250,000 monthly listeners is currently getting $20 here, $50 there, $100 if they’re lucky.

That type of money does not:

• Pay rent

• Fund marketing

• Change strategy

• Enable growth

So what do they lose under this model?

Almost nothing financially.

What they gain is clarity.

They learn:

• Streaming isn’t income… yet

• Audience-building is the job

• Marketing matters

• Releases need strategy

This doesn’t “squash the little guy”. The little guy is already screwed. A threshold model would encourage investment, and forces resources toward actually growing a project.

Hot Take: If You’re Not Investing, You Shouldn’t Be Paid Yet

This is where people get emotional.

But music is a product.

If you’re not:

• Investing time

• Investing money

• Investing in strategy

• Investing real effort

into building demand, why should a platform subsidize you?

No other industry pays creators for existing.
They pay for audience demand.

Spotify is not a charity.
It’s a distribution platform.

Before streaming platforms existed, if you didn’t invest in a team, a record deal, or a distribution deal, your music wasn’t on store shelves. Period.

Why does everyone that uploads music onto Spotify feel that they’re entitled to a living wage when they’re not getting any attention?

It’s a harsh truth.

Other Platforms Already Do This (Quietly). Music Is Late.

The idea that “every stream should earn money” is emotionally satisfying, but it’s not how creator monetization works anywhere else.

Most platforms already run a threshold system. You don’t earn until you’ve proven demand.

YouTube: No Threshold, No Money

On YouTube, you don’t touch monetization until you qualify for the YouTube Partner Program.

That typically means 1,000 subscribers, plus either:

• 4,000 valid public watch hours in the last 12 months, or

• 10 million valid public Shorts views in the last 90 days.

Translation: YouTube is saying, “prove people actually watch you, consistently, and then you earn.”

TikTok: You Don’t Get Paid Just for Posting

TikTok’s Creator Rewards Program requires:

• 10,000 followers, and

• 100,000 video views in the last 30 days along with additional eligibility requirements.

Translation: TikTok is saying, “prove you can pull attention right now, not once.”

Spotify Has Already Started Doing This

Spotify itself implemented a “noise floor” in 2024.

Tracks must now hit at least 1,000 streams in a 12-month period to generate royalties, with sub-threshold payouts redistributed into the broader pool. AKA, raising the pay-per-stream for the ones above that.

This is the less radical version of the argument I’m making - and it already proves the logic works. Tiny payments spread across low-performing tracks isn’t meaningful, so why not increase payouts for artists who actually depend on streaming royalties as a revenue stream.

Why 250,000 Listeners Is Just the Next Logical Step

If YouTube requires consistent watch-time, and TikTok requires recent velocity, and Spotify already enforces a 1,000-stream floor…

Then moving that floor to 250,000 monthly listeners isn’t some evil gatekeeping fantasy.

It’s a business decision, it would:

• Reduce dilution

• Concentrate payouts

• Reward demand

• Make “mid-tier streaming” mean something again

And here’s the part everyone avoids:

Most artists below 250K aren’t being “robbed” of life-changing income. They’re being paid crumbs. The current system makes them feel included while keeping them broke.

The Shift

The current system:

• Rewards volume, not value

• Spreads money so thin that it helps no one except the top 0.01%

• Keeps artists dependent, unsustainable, and broke

A threshold model:

• Rewards seriousness

• Rewards audience-building

• Rewards longevity

• Creates real businesses

Instead of this dystopian world where all artists make a living, Spotify needs to pay fewer artists, better.

The Real Question

Do we want:

• Millions of artists earning nothing forever?

Or:

• Mid-level artists earning enough to stay in the game?

Because the current system guarantees the first.

A 250,000-listener threshold gives us a chance at the second.

The Takeaway

Spotify paying everyone feels fair, but it actually just destroys the middle.

A 250,000-listener threshold wouldn’t punish emerging artists.
It would finally be able to support the ones who are emerging successfully.

The industry doesn’t need more participation.
It needs more sustainability.

This is how you get it.

The Actual Math

As I dug into the actual economics behind this proposal. I found some numbers that made the conversation far more interesting. After a couple conversations with chat, I’ve figured out the actual economics of why this threshold would actually change everything.

Spotify pays a fixed pool of about $10 billion per year.

That number doesn’t change.

What does change, is how many streams that money is divided across.

Right now, Spotify pays every track above 1,000 streams, spreading that money across roughly 13 million songs. With this comes extreme dilution, and an average pay-per-stream rate of about $0.004.

If the threshold moved to 250,000 streams, the number of eligible tracks drops to roughly 1-2 million.

Same money. Radically fewer mouths.

Conservatively, this would raise pay-per-stream by about 70%.

On the higher side, this could increase royalty payout but 2x.

This would put the new payout range at roughly:

$0.0065 to $0.008 per stream

No new revenue, no higher subscription prices, just less dilution.

What That Unlocks for the Middle Class

This is where the system finally starts working.

• 250K monthly streams
  ~$1,000 → ~$1,600–$2,000

  • $12,000 per year vs. $19,200 - $24,000 is the difference between working a part-time job or not.

• 500K monthly streams
  ~$2,000 → ~$3,200–$4,000

  • $24,000 per year vs. $38,400 - $48,000 turns a hobby into a full-time job.

• 1M monthly streams
  ~$4,000 → ~$6,500–$8,000

  • $48,000 per year vs. $78,000 to $96,000 is the difference between an entry level salary and a manager or director role salary (in corporate terms).

• 5M monthly streams
  ~$20,000 → ~$32,000–$40,000

  • $480,000 per year off streaming alone is not a small number.

This is sustainability.

That’s artists funding their next release without debt.
That’s small teams getting paid.
That’s food being put on tables for families.
That’s leverage.

That’s a middle class that can actually grow.

---

Why This Changes Behavior (Not Just Payouts)

A 250K threshold doesn’t just move money.
It changes incentives.

It tells artists exactly what matters:

• build real audiences

• invest in marketing

• release with intention

• think long-term

It turns 250,000 monthly streams into a milestone.
It turns 1 million monthly streams into a business event.
It turns momentum into something that compounds.

That’s how careers form.

The Big Truth

Spotify doesn’t need to invent a new system.
It already uses thresholds.
It just needs to finish the job.

The money is already there.
The demand already exists.
The middle class is already trying to break through.

The only thing missing is a model that lets success actually mean something.

Pay fewer artists- BUT!
Pay them meaningfully.
Let the middle class win.

Make sure to subscribe to this Substack so you get nudged whenever I post. It also helps with the algorithm, so the support means a lot.