If Spotify were benefiting from the extremely low royalty payments, then maybe I'd side with the argument Spotify is taking artists for a ride, but the matter of the fact is Spotify are not profitable whatsoever. This amazing service is operating at a loss and has been for years now. If artists want better payouts maybe they should lobby their labels to do so.
A service like Spotify costs a lot of money in terms of bandwidth and infrastructure to operate. Storing and streaming music isn't a trivial thing, the costs of operating the service are a massive percentage of Spotify's monthly expenditure fees. It's not costing the artist money to put their music on Spotify, it's costing Spotify money to put an artists music on their platform and allow others to listen to it. The royalty amount might be low, but make no mistake, the artist is still getting a better deal than Spotify currently is.
The only people currently winning out in the online music space are Apple and music labels. Services like Spotify and artists themselves are being shafted and have more in common than they think.
To put this in perspective, $20 is a ridiculous amount of money compared to traditional record contracts, but after administrative and promotional fees were extracted, the classical record contract could often cost musicians money. The recording industry has been preying on musicians for years, but music fanss have been more than willing to pay their favorite bands for merch or buy expensive concert tickets for a live event. Ticket scalping is booming.
There are legitimate revenue streams available to musicians, but pay-per-listen is not going to be profitable.
