An image from Spotify’s annual Stream On event.
One of the main complaints about Spotify is that there simply isn’t enough money being paid out. That’s a common criticism from musicians all around the world, but it can be hard to reconcile when looking at the numbers shared by the streamer, which are, in a word, massive.
Published on Spotify’s website Loud & Clear–which “aims to increase transparency by sharing new data on Spotify’s royalty payments and breaking down the global streaming economy, the players, and the process”–many of the figures reported regarding how much money is being paid out and how many artists actually earn quite a sizable paycheck from the streamer are quite shocking, and they’re a sign that the music industry is growing.
Now, these numbers don’t mean everything is hunky dory in the music industry. In fact, while billions are being paid out, there are still countless artists–even well-known ones–who don’t see the royalties add up for one reason or another. Nevertheless, the figures reported are eye-catching, and they show that at least this part of the business is expanding and that more money is moving around.
The latest edition of the company’s royalty report was published in connection with its much-hyped Stream On event. The show provided an opportunity for the streamer to showcase what new features and products it has been working on, as well as to update the world as to how large it has become.
Here’s a look at some numbers featured in the most recent royalty report published by Spotify that are worth noting.
$40 Billion
The all-time Spotify payouts to music rights holders have almost hit the $40 billion mark—a truly staggering sum. There has been a trackable increase in streaming royalties payout each year by the company, leading to record-breaking revenues and growth for various types of rights holders who represent artists and songwriters. Record labels, independent distributors, publishers, performance rights organizations, and collecting societies are among the rights holders who have benefited from this upward trend.
70%
Spotify has been paying back nearly 70% of every dollar generated from music as royalties to rights holders who represent artists and songwriters. These organizations, which include independent distributors, publishers, performance rights organizations, record labels, and collecting societies, then pay the artists and songwriters based on their agreed terms. To generate its massive revenue, Spotify makes money from both subscription fees paid by premium listeners and fees from advertisers who shoehorn their commercials to those using the free tier.
1,060
According to recent figures released by the music streaming platform, there has been a substantial jump in the number of artists earning over $1 million per year from the service. In 2022, that sum was 1,060 acts, which shows a significant increase since 2017 (the year noted by the platform), when only 460 artists were able to achieve this feat.
20%
In just a few short years, Spotify has increased the share of global recorded music revenue it is responsible for from less than 15% in 2017 to more than 20% in 2022 (using data provided by the IFPI).
200,000
Spotify’s financial success largely depends on a select group of artists. These musicians, numbering around 200,000, consist of both professionals and those who aspire to make a living through their music. They have a tremendous impact on the streaming platform, generating 95% of the total royalty pool, which is notable considering they also only represent 15% of all tracks uploaded to Spotify. The company points out that while many outlets cite a figure that states that nine million musical acts have uploaded at least one song to the platform, it’s these 200,000 that the streamer is really focused on.
Source: https://www.forbes.com/sites/hughmcintyre/2023/03/09/5-important-numbers-from-spotifys-annual-music-royalties-report/