SXSW Rewind… Back in 2010 during Daniel Ek’s Keynote Speech an audience member who identified themselves as an independent musician asked how much activity it would take on Spotify to earn just one US Dollar. The 27 year old wunderkind and CEO of the company was stumped for an answer… Five years later we have a pretty good idea why.
2010… #SXSW Rewind…
Live Blog: Spotify CEO Daniel Ek Says Music Service Now Has 320,000 Paid Subscribers | TechCrunch
Q: How many plays equals one dollar?
A: Depends on the type on contract with the publisher/record labels. We share the rev we bring in. You can’t really equate to ‘per play’ we look at all our ad rev. Creates a bucket. For instance how do you account for a purchase of a song. There is no easy answer to your question. Over time our ad revs are growing, number of downloads growing. Amount of rev we bring in is growing.
Will Spotify Be Fair to Artists? | Technology Review
I couldn’t help noticing, however, Ek’s artful dodge to the question of how artists are paid by his service. The subject was broached by an audience member, who identified himself as an independent musician and thanked Ek profusely for the great application. He wanted to know how much he would be paid.
“It’s complicated,” was, in essence, Ek’s reply. But he did reveal that it’s a revenue sharing model; artists get paid a proportion of whatever Spotify gets paid, presumably based on the number of plays on the site they receive.
Ek’s reply was disappointing because this is the million dollar question for many music sites.
Dodgy from the start. What do you expect from one of the co-founders of U-Torrent… Economics only a pirate could understand?
A Tale of Two Pirates? Daniel Ek (uTorrent) and Kim Dotcom (Megaupload)
USA Spotify Streaming Rates Reveal 58% of Streams Are Free, Pays Only 16% Of Revenue
The Trichordist 
The inability to answer a simple question with a simple answer is a huge red flag.