The Core Reason: Local Pricing
Streaming platforms set subscription prices based on local purchasing power. Spotify Premium costs:
| Country | Monthly Price (USD equivalent) |
|---|---|
| United States | $11.99 |
| United Kingdom | $13.00 |
| Germany | $11.50 |
| Brazil | $3.50 |
| India | $1.99 |
| Nigeria | $2.50 |
When subscriptions cost less, the royalty pool for that market is smaller. Per-stream payouts are proportionally lower because there's less money to distribute.
How Royalty Pools Work
Streaming royalties aren't calculated per-stream directly. Each market has a monthly royalty pool:
- Platform collects subscription and ad revenue in that market
- Platform takes its cut (roughly 30%)
- Remaining 70% is the rights holder pool
- Pool is divided by market share (your streams / total streams)
If Spotify India collects $10 million monthly and your tracks represent 0.001% of Indian streams, you receive 0.001% of the pool - around $100. If Spotify US collects $500 million and you have 0.001% share, you receive $5,000.
Same market share, 50x difference in payout, purely because of pool size.
The RPM Variation
This is why revenue per mille (RPM) varies dramatically by country:
What This Means For Artists
If your audience skews toward high-RPM countries (US, UK, Northern Europe), your effective per-stream rate will be higher than averages suggest.
If your audience is concentrated in emerging markets (India, Southeast Asia, Latin America), you'll see lower per-stream revenue despite potentially high total stream counts.
Neither is inherently better. High-RPM markets have more competition and saturation. Low-RPM markets offer growth potential as economies develop and subscription prices rise over time.
Can You Target High-RPM Markets?
When running advertising campaigns, you can weight spending toward higher-RPM territories. A dollar of ad spend in the UK generates more royalty revenue per resulting stream than a dollar in India.
But this trades reach for efficiency. You'll acquire fewer total listeners at higher cost per listener. Whether that trade-off makes sense depends on your goals.
For organic growth, you don't control where listeners come from. Focus on making good music and building audience wherever they find you. Geographic revenue variation is a fact of the streaming economy, not a problem to solve.
Long-Term Trends
Emerging markets are... emerging. As economies grow and streaming matures:
- Subscription prices tend to rise
- Premium subscriber percentages increase
- Ad markets develop
- Per-stream rates improve
India's streaming market is projected to grow 15-20% annually. Artists building audience there now may benefit from improved rates later. The $0.08 RPM of 2025 won't last forever.
Understanding geographic variation helps set realistic revenue expectations. It shouldn't change your fundamental strategy of reaching listeners wherever they are.