Spotify is sweet for artists – that’s the message underlying virtually each level made within the newest version of the music platform’s annual Loud & Clear music economics report.
It’s some extent that Spotify could really feel it must make, given some current criticism the platform has obtained from some artists and trade insiders about what they see as low royalty charges or unfair practices.
Witness, for example, Snoop Dogg’s current criticism of Spotify’s cost construction. He claimed he obtained lower than $45,000 for accumulating over one billion streams on the platform. (Spotify responded simply final week in a press release to TMZ, nevertheless, noting that, “it’s nicely documented {that a} billion streams on Spotify generates tens of millions of {dollars} to rights holders. It’s unlucky to listen to that Spotify’s funds didn’t make it by way of to Snoop.”
Spotify factors out in its new report that there are artists making small quantities on its platform, however that there are extra artists being profitable on the platform than ever. And a few (just a few) of those artists are even turning into “new music millionaires.”
Based on the up to date report, 12 million artists uploaded no less than one observe to Spotify in 2024, up from 10 million in 2023.
There have been 1,450 artists who generated USD $1 million or extra in royalties from the platform. (That’s the variety of recording artists whose catalogs generated recording and publishing royalties over $1m on Spotify alone).
That determine is up from round 1,250 who generated that a lot within the prior yr. (Spotify estimates these artists made no less than $4 million every in 2024, when together with different sources of earnings.)
Apparently, Spotify says that greater than 80% of the artists who earned over $1 million in royalties final yr didn’t have a single music attain Spotify’s International Every day High 50 chart in 2024.
Nor are they essentially legacy artists with a sentimental following from again within the day – nearly all of them solely launched their music careers after 2010.
Spotify’s takeaway? “Success within the streaming period doesn’t require a chart-topping hit or a decade-spanning catalog – it’s about constructing a loyal fanbase that retains coming again.”
Nevertheless it’s not simply concerning the one-million membership – there are extra artists incomes royalties at each earnings degree, the Loud & Clear report says.
There have been 71,200 artists who generated $10,000 or extra in 2024, and 12,500 who generated $100,000 or extra.
Each these teams of earners have roughly tripled in measurement since 2017, in accordance with Spotify.
Nonetheless, given there are 12 million uploaders on Spotify, which means that lower than 0.6% of Spotify uploaders generated no less than $10,000 in 2024.
Seen as a share of whole uploaders, the numbers for every of these royalty-generating thresholds get even smaller the upper we go.
The 12,500 artists who generated $100,000 or extra on Spotify final yr characterize simply 0.1% of all uploaders.
And the 1,450 artists who generated over $1 million accounted for simply 0.012% of Spotify’s 12 million uploaders.
What we’re , in accordance with Spotify, is the “Paradox of the Fashionable Music Business.”
“Streaming has allowed tens of millions to simply share their music globally — that’s an incredible factor,” mentioned Spotify within the report. “However the sheer quantity of uploaders means the fraction who discover success seems smaller over time.”
MBW has beforehand discovered it helpful to check the success charge of Spotify’s uploader base with that of one other extremely aggressive discipline by which to pursue a profession: skilled soccer.
It’s value doing that once more this yr for a little bit of broader context about what these new stats imply for these pursuing a profession as an artist.
There are an estimated 240 million registered soccer gamers worldwide. Based on FIFA’s 2023 Skilled Soccer Report, there have been “128,694 skilled male footballers at 3,986 golf equipment in 135 international locations all over the world.”
In different phrases, a type of skilled soccer gamers had a 0.053% probability of turning into a “skilled” – i.e paid (one thing) to play soccer.
As you possibly can see, that’s a fraction of the prospect (0.59%) that an artist has of producing $10,000 or extra per yr on Spotify right now.
Elsewhere within the report, Spotify mentioned it has paid out practically $4.5 billion to publishing rightsholders globally over the previous two years, including that the payout noticed “double-digit share development” from 2023 to 2024.
“Songwriters – by way of their publishers, PROs, and accumulating societies – are producing record-breaking revenues pushed by streaming providers,” Spotify asserts.
Final yr, Spotify mentioned that music publishing rights holders had obtained practically $4 billion of the cash paid out by Spotify over the prior two years.
That new $4.5 billion stat arrives amid the platform’s bundling dispute with the MLC over mechanical royalties for songwriters and music publishers within the US.
“Songwriters – by way of their publishers, PROs, and accumulating societies – are producing record-breaking revenues pushed by streaming providers.”
Spotify Loud & Clear report
The report additionally stresses – as Spotify had reported earlier than – that the platform’s payouts to the broader music trade reached $10 billion in 2024, up by $1 billion from 2023.
Spotify’s music trade payout recipients embody document firms and music publishers, plus unbiased distributors, efficiency rights organizations, and accumulating societies.
Only a decade in the past, in 2014, Spotify’s whole payout was one-tenth that quantity, at $1 billion.
Notably, the platform had round 15 million paying subscribers again in 2014, versus 263 million as of the tip of 2024.
“Spotify paid out greater than another retailer or streaming service in 2024,” the report mentioned, including that the $10 billion payout “is the biggest in music trade historical past – greater than any single retailer has ever paid in a yr, and over 10x the contribution of the biggest document retailer on the top of the CD period.”
Spotify additionally reviews that unbiased artists and labels collectively generated greater than $5 billion from the platform in 2024 representing about “half of whole Spotify royalties for an additional yr”.
The Loud & Clear report additionally highlights one thing that MBW has beforehand identified – the majors are dropping market share on the platform.
Based on Spotify’s newest 20-F submitting with the Securities and Alternate Fee, the three majors (Sony Music, Common Music Group, and Warner Music Group) plus indie consultant Merlin obtained 71% of Spotify’s payouts in 2024. That’s down from 74% a yr earlier, and 87% again in 2017.
Spotify famous in its report that it globally “represents about one-third of general recorded streaming income, however represents over 50% of indies’ streaming income,” the report mentioned, citing knowledge from IFPI and MIDiA.
Within the view of the Loud & Clear report, “That over-index of Spotify in indies’ income reveals that our mannequin uniquely creates extra alternatives for extra artists to construct sustainable careers in music”.
“Due to streaming, extra artists than ever earlier than are producing royalties at each profession stage. Greater than at any time in music historical past. And we expect that’s what actually issues.”
Spotify Loud & Clear report
But the report notes an issue with the proliferation of indie and DIY artists that others within the enterprise have famous earlier than: Because the variety of artists grows quickly, turning into found as an artist turns into harder.
Spotify’s rationalization of what it calls the “paradox of the music trade,” as detailed above, highlights this actuality.
The corporate argues, nevertheless, “due to streaming, extra artists than ever earlier than are producing royalties at each profession stage” and that “greater than at any time in music historical past. And we expect that’s what actually issues.”
Elsewhere within the report, Spotify revealed that “extra artists are succeeding throughout borders, with extra languages and various voices breaking into the mainstream”.
Based on Spotify, in 2024, the artists who generated no less than $100,000 in royalties in 2024 recorded music in over 50 languages, whereas the artists who generated no less than $1 million on Spotify recorded music in 17 totally different languages, each greater than double the languages at these thresholds in 2017.
Spotify additionally highlighted how “world fandom fuels artist success”. The report famous that over 50% of the artists who generated no less than $1,000 in royalties on Spotify in 2024 made nearly all of their earnings from listeners exterior their dwelling nation.
The corporate mentioned that “this demonstrates the pivotal position that export performs within the success and sustainability of an artist’s profession”.
Round one-third of artists who generated no less than $1,000 noticed greater than 75% of their royalties come from exterior their dwelling international locations.
And on the $100,000 degree, over 80% of those artists “have teamed up with musicians from overseas”.
One ultimate notable tidbit from the report: Spotify notes that whereas there are presently 500 million paying music streaming subscribers worldwide (IFPI), “a future with one billion paying listeners is inside attain.”
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