Spotify's Latest Merch Move Is a Win for Artists (and a Bigger Win for Shopify)
Spotify and Shopify already had a few things in common—both are huge names in their respective online niches, both have extremely similar names that have nearly led to embarrassing typos in Promo Marketing articles on more than one occasion. But now, they have another thing in common: They're working together.
The two companies announced this week that Spotify will begin offering Shopify integration directly in-platform, allowing artists that have Shopify stores to offer merchandise for purchase right from their profile page. Artists can select up to three items to display, and can publish it to their profiles in a few clicks via Shopify.
The move is a big deal for artists. Spotify is famously stingy with its royalty structure, paying artists an average of $0.003 per stream. At that rate, it takes about 3,300 streams for an artist to make $1. (The Onion addressed this in typically brutal fashion.) And while Spotify says it's paid out a total of $23 billion since its start, only a small percentage of that actually goes to artists. Most goes to rights holders.
ok so whatify told you that i can finally clear up all the “Spotify or Shopify” business
*clears throat* 🎶
— Shopify (@Shopify) October 20, 2021
Merch, of course, is one of the top revenue streams for most artists. Spotify already had some merch integration capabilities—via Merchbar, which sites like YouTube also use—but Shopify tips the scales further in the artists' favor. Shopify is fast becoming the biggest name in e-commerce hosting, with many artists likely using it already. Merchbar, for example, does its product hosting by integrating with stores already hosted on Shopify (among other sites).
Direct integration with Shopify streamlines the process for artists. And, according to TechCrunch, it offers added capabilities other e-commerce hosting sites may not:
Shopify also says its larger app ecosystem could help artists enable new services, as well, like print-on-demand or product discovery tools. And Shopify’s infrastructure is able to manage high volumes of traffic for artists with large followings who may send surges at times—like when they drop new products, for example, Shopify added.
But the move an even bigger deal for Shopify. As of March, Spotify had an estimated 8 million artists on the platform. The company said it has 165 million subscribers and projects to have over 400 million monthly active users by the end of 2021. That's an enormous pool of potential new revenue for Shopify, which makes its money via not just store-owner subscription fees, but also transaction fees and payment fees.
“Artists today are entrepreneurial," Amir Kabbara, Shopify’s director of product, said, according to TechCrunch. "They’re building multifaceted brands and businesses, and now we’re making it easier for them to meet fans where they are. By bringing entrepreneurship to Spotify, we’re empowering artists to think beyond the traditional merch table with new ways to monetize, and to experiment with their brands through commerce.”
The partnership seems like a win for everyone involved. Spotify gets more artist-friendly. Shopify gains access to an expanded customer base. Artists have an additional and potentially easier way to make money. And merchandise vendors that work with bands and musical artists get a potential uptick in order volume.