Spotify is offering artists two advantages: a bigger financial cut and ownership of their recordings. The deals, furthermore, are not exclusive, leaving the artists free to license their songs to other streaming companies, like Apple Music and Amazon.
Spotify typically pays a record label around 52 percent of the revenue generated by each stream, or play, of a given song. The label, in turn, pays the artist a royalty of anywhere from 15 percent to, in some cases, 50 percent of its cut. By agreeing to a direct licensing deal with Spotify, artists and their representatives are able to keep the whole payout.