“$5,000 seems like a lot of investment for 260k streams. What makes this worth it?”
⬆️ That’s one of like 10 reader responses I got to last week’s email about my marketing results, all of which circled similar themes:
How much did I make from streaming? How’d I get so handsome? Was the music marketing spend worth it?
All are very fair questions. Since at least two of them appear to be very common ones, too, I figured I’d dedicate this week’s email to answering them.
Get ready to be unimpressed: In today’s newsletter, I’ll share exactly how much I made from 260,000 Spotify streams.
But I’ll also share why, in spite of the paltriness of my direct monetary ROI, I still think my $5,000 in marketing spend was worth it.
First, here’s how much I’ve made from my streams so far:
Yep, that’s a whopping $782.93. Thanks, Daniel Ek!
For some context, that’s literally all of my streaming royalties from the last eight months of payouts, including those from non-Spotify platforms and from older songs I’ve never promoted directly.
The report is about three months delayed, (it takes a while for royalties to be compiled), so I expect the total number attributed to my catalogue in the past year will continue to rise.
Still, there’s no getting around it: In purely financial terms, it’s obvious that my marketing has been a major net negative.
And that’s why the Two Story Media Instagram comment section is always chock-full of notes like this:
I’m sympathetic to this line of thinking; it’s sensible to want to make money from your art, and music is valuable, and streaming royalties payouts are, by any sane analysis, wickedly unfair.
All of that is true.
But also, this sort of question assumes a false dichotomy:
Either you make your marketing budget back directly from streams alone, or you’re setting your money on fire.
Those actually aren’t the only two options, though. The truth is that there’s a wide middle ground.
Here’s how I break down whether or not Spotify promotion is worth it.
1) If your sole goal is direct financial ROI from streaming royalties, then Spotify promotion is almost certainly not worth it.
I’ve run hundreds of campaigns. I can count on one hand the number that have directly made back their ad spend from streaming royalties. It’s possible to recoup the spend directly – it’s also really, really unlikely.
But, in my opinion, this first goal is misguided.
2) If your goal is long-term financial sustainability from your music, then Spotify promotion can be worth it.
The switch is to view your promotion not as direct response marketing, but as awareness marketing. In the same way that Coca-Cola doesn’t expect to make their ad spend back directly from their Super Bowl commercial, you shouldn’t expect to make money from showing your music to a bunch of people.
Put simply, in this view, the point of Spotify promotion is not to sell a product. It’s to build an audience.
The rationale for doing so is that, with an audience, you can monetize your music. Monetization is still incredibly hard – you’ll need to play shows, or sell merch, or start a Patreon, or (probably) do all of the above – but an audience makes financial sustainability possible.
The lack of an audience makes financial sustainability impossible.
Spotify promotion is just one way (out of many) to build your audience.
(There’s a winding rabbit trail I’m going to chase here about the misrepresentation of music as a product. Music is not a product, thank God; it’s the form of engagement that’s the product.
To illustrate: People don’t pay Daniel Ek $9 per month for your music, but for the chance to access all of the music in the world at any time in any place. People don’t pay $500 to attend a Taylor Swift concert for the music; they could literally listen to her songs at better sound quality for free online. They pay to participate in an experience with 50,000 other people.
The upshot of all of this is that, if you want to make money from your music, you shouldn’t get obsessed with placing a value on some abstract concept of art; instead, you should figure out how much people will pay for access to your work in different forms, then package it into the ones which are more monetizable.
Or you should just forget about the money altogether. You’ll probably be happier that way.)
3) Finally, if your goal is to have people other than your mom hear your music, then monetization aside, of course good Spotify promotion is worth it.
This is the boat I’m in, personally. I pay for all sorts of things for which I never expect to receive a financial return; Spotify promotion is one of them.
I’m not concerned about making money because I have no plans to make music my day job. But I do want people to hear my music, because I’ve put a ton of time and heart into creating it.
I guess it boils down to that fact that, if my marketing budget leads to messages like this:
Then, yes, I’d consider the $5,000 to have been worth it.
Hope this helps you think through your own goals with marketing. As always, thanks for reading, and here’s wishing you good luck.
– Jon
