Spotify doesn’t pay artists or songwriters directly.
Spotify primarily makes money for music from two sources: Spotify Premium subscribers and advertisers that support Spotify’s Free tier. Approximately two-thirds of this money is paid out to music rights holders in what is called the “royalty pool.”
Spotify allocates that royalty pool based on each rights holder’s streamshare on Spotify. This money is not divvied up based on a fixed amount per stream, because Premium subscribers do not pay per stream; they pay a subscription fee that grants them unlimited access to all of the music on Spotify. For example, in 2024, if an artist received 1 in every 1 million streams on Spotify, that generated around $10,000 on average.
For more, we encourage you to check out the following videos: How the Money Flows, and How the Money Flows (Publishing Edition).