98% of every dollar made by spotify goes on paying music royalties

Found this stat from a piece on privco, a private company financial data site. We're aware of the graphs like this that show how many plays a song needs to make a set amount of money for an artist:


When you see the unflattering numbers here, it's easy to think that spotify must be creaming off a huge chunk of coin each time for the artist be that royally screwed.

What greedy money loving, music and artist hating bastards they must be, right?

According to this report, things are a bit more complicated than that:

With 98 cents of every dollar of revenue going to pay music royalties, this leaves only 2 cents on the dollar to cover ALL other operating costs, from all payroll, overhead, office rent, sales, marketing, data server costs, and so on, which is mathematically impossible

Now it's not clear if I'm comparing like with like here (my understanding of the term royalties normally refers to song composers, and if that we're the case performers of songs would have to be accounted for separately, making the numbers even worse), but either way it doesn't look too great either for Spotify, or for artists.

I wonder if Rdio is anymore sustainable.

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