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It's a lot more nuanced than that.

The payout per play is basically different between free and premium users as they add more to the revenue shared by all the artists.

If you look at revenue for premium users, then it's probably much higher than that, but when you add free users, it will lower the average.

A solution you might think would be to remove the free-tier. But that will only do one thing: cut a (admittedly smaller) revenue stream for artists, cut a promotional stream for artists and less possibilities to upsale premium accounts to free users.

Someone who isn't even a free user will either not listen to music or pirate it. Is that preferable?

A lot of artists admit that Spotify pay-out per stream is certainly lower, but it's still dominating all the other streaming revenues, as long as you are actually an artist who has the potential to make any. Some unknown artist selling 1 CD for $10 on bandcamp with no listen on streaming services will probably think differently.

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