How Playlist Promotions work and Calculating The Results
You get a lot of insights from social platforms but how to calculate playlist promo and results is still tricky.
A performing, recording, or independent musician has a 5% chance to live solely off their music. This includes musicians who live with their family unit. Those who are a part of a large music label, and finally the ones who spend at least 30% of their working hours performing in venues, bars, and everything in between.
The stereotype of the starving artist has seldom changed over the last century. However, the hope digital outlets generate has given musicians of this generation a leg up on their senior counterparts.
CD sales and demo tapes dominated the revenue stream only 30 years ago. Today the individual track, the stream, the view, and finally the live show, are inescapable reaching one’s fans and monetizing a career.
In light of this new form of digital dominion, the industry of playlist curators exploded and is the main gateway for artists to get their music out.
Riddled with bot accounts the market is difficult to navigate. Yet, there is hope if you find the right agency to rummage through the fraudulent accounts.
Playlist marketplaces are important to engage in Playlist Promotion
Playlist marketplaces are a jungle of questions for most artists. Will the streams count, will they lead to more, and is it really worth it? Usually composed of a shadowy SEO-jammed website with user-friendly buy buttons, playlist marketplaces are in the grey zone of the music promotions tool kit.
As buying views is pretty controversial on account of bot accounts and automation, the proper way of addressing playlist curators is the classic pitch, which an artist can do via submission portals or directly by finding the owner of the playlist in question.
Not always the simplest method, nor does it usually garner a lot of response, but if your music is fly, your pitch is clean and your timing on when you sent the message was properly throughout, you should expect at least a 15% positive response rate. Which is not bad, considering it’s a question of numbers. The more playlists you are on, the more views or streams you get.
The Reality of Streaming Royalties
Despite streaming making up over 60% of all redistributed revenue in the music industry, the average artist will be making under 1000$ a year from streaming. In the case of Spotify, arguably the largest streaming platform in the world, a recent study by Forbes demonstrated that from their 7 billion dollars of royalty payouts, 28% of the artists received over 10 000$.
Now, that might seem like a lot, but consider that the 28% includes label artists, superstars, film scores, and legacy artists that have spent decades making a career. This essentially means that they are most likely equipped with a promotional or marketing team, that monitors, tracks, and adjusts their reach metrics to maintain a steady flow of listeners and onboard new fans.
Calculating Playlist Promotion Campaigns
So, let’s do some calculations. At an average market payout of 0.006325 $ / stream, 159 000 streams would gross roughly 1000 USD, which means to reach that 10k revenue milestone an artist would need to generate close to 1,59 million views in the first year of their Spotify career.
With Spotify advertising starting at 250 USD per ad campaign, and pseudo-view marketplaces selling 10k views for an average of 50 USD, an artist would be able to hit 100k views with roughly 750 USD. Assuming that they would make an extra 30% viewership count due to the ad push, 130k views would have an average cost of 0.005769 $, at a margin of roughly 8% grossing 822.25 USD a profit of 72.25 USD. Following the numbers, the average value of your first batch of streams is 0.000556 $. That’s right, dollars, not satoshi’s.
Streamlining your work and pushing with paid advertising is an option. But at an 8% margin, not counting the risk, the time, the constant monitoring, and the artists’ scalable popularity, which needs to break through the industry’s saturated market, it is not a good business case and does not offer a livable wage for anyone.
Firstly it is important to realize that your chances of reaching monetization amounts with a laissez-faire attitude on streaming platforms like Spotify are slim to none. All streaming platforms are marketing or promo dependent if you want to use them as a source of revenue, rather than just another profile. According to Spotify, 57 000 of its nearly 10 million creators represent over 90% of the streams, and therefore its royalty redistribution
The rule of thumb for most professional artists is 50 / 50, 50% of the time you market and build your brand, and 50% of the time you make your art; fair enough. But this means your learning curve, the trial, and error of target markets, the engagement analysis, and of course the adaptation of your strategy can only be done during 50% of your waking & working hours.
If algorithms were that simple to adapt to, there wouldn’t be a 50 billion $ market cap in music marketing technology. The reality of the situation is that without professional help or some type of technological literacy, you are basically shooting in the dark hoping to hit a fly on the nose. Reliant on fan 2 fan engagement, the artist without a team nor the digital know-how is setting themselves up for failure and is unfortunately caught in the blaze of hopium offered by most platforms.
Taking into account that a salary of 10 – 30k USD may be an upper or middle-class income for the developing world, but in all major North American and European cities, where the average rent is between 1000 – 1800 USD, an annual income under 30k means you are spending over 50% of your net on basic housing before taxes and food are even brought into the mix.
Needless to say, if this is your only income, you are stuck in a literal poverty cycle and will most likely be going through serious financial stress as life is far from being a predictable path.
To stream or not to stream why it matters when you calculate playlist promo?
For MPT Agency, all industries throughout history have demonstrated, you cannot challenge technological innovation. All artists should be present on all streaming platforms, be it only for the visibility or convenience factor for fans. The one they ultimately choose to use in their conversion funnel is dependent on the artists’ budget, their time metrics, and of course, their understanding of the algorithmic ecosystem that governs the how’s and why’s of visibility.
Paying for streams can be a part of larger campaigns the artist adopts in their path to success, but in no way, shape or form should it be the be-all and end-all of their exposure strategy.
Make sure you check our blog about influencers who can be a huge help to your playlist campaign. We regularly post key artist content so make sure to follow us on Instagram for more music marketing-related updates.
Subscribe To Our Music Marketing Newsletter!
News about music marketing strategies to the music business and beyond.
Delivered to your inbox once a week.