Spotify keeps about 30¢ of every dollar. The labels take the rest.

Revenue splits into 2 flows: To rights-holders $11B, Spotify keeps $4.7B (the focal flow). Spotify FY2024: 30.1% gross margin; ~70% flows straight to rights-holders.

Spotify is a pass-through, not a high-margin tech company. About 70% of every euro it earns flows directly to labels and rights-holders as licensing costs. What's left, roughly 30¢ on the dollar, has to cover all of Spotify's own costs: engineers, servers, ads, and R&D. The actual operating profit is razor-thin. It looks like a tech giant but runs the economics of a distributor.

Streaming platforms don't own the content, so they can't own the margins. The labels set the floor; Spotify competes on everything above it.