Spotify has updated its “Loud & Clear” website that seeks to offer more transparency on how much rights holders get paid from Spotify. It is important to note with all of these finds that the numbers being thrown around are paid to rights holders, not necessarily the artists themselves. The various middlemen like labels, publishers and PROs can be vital to the process at a fair rate and other times take too much for themselves.
In 2021, Spotify paid out $7 billion to the music industry, according to the streaming service. Over 1,000 artists generated $1 million, though not all of that money went to the artist. There was a 120% increase in catalogs that generated $10,000 in revenue for rightsholders on Spotify alone, from 23,400 to 52,600.
The number that everyone always wants it the pay-per stream. According to the FAQ of the website (worth reading since it has a lot more information), Spotify says that since “fans do not pay per song and no major streaming services pay per stream, so we don’t believe that a ‘per-stream rate’ is a meaningful number to analyze.” That is some serious shade at SoundCloud who launched user-centric payouts for a select number of artists last year.
They acknowledge that the per-stream payouts seem low and that is for three reasons. The ad-supported tier pays less, prices for Spotify in other markets (ie not wealthy European and North American countries) is lower to encourage growth for Spotify and thus has lower payouts, and high engagement and streaming numbers per user.
There are loads of songs generating quite a bit of money. 718,000 songs have surpassed a million streams, while 238,000 songs received a million streams in 2021 alone. Over 230 songs have even reached a billion streams.
The big artists and majors still dominate. On Spotify in 2021, 12% of US streams were from the top 50 artists. In 2021, more than 28% of artists who generated over $10K from Spotify are self-distributed, and 34% live in countries outside the top ten music markets. The majors booked over $4 billion in profit in 2021.
There are eight million profiles on Spotify, but only 165,000 artists have released at least ten songs all-time and average at least 10,000 monthly listeners.
According to the website, Spotify makes money primarily from two sources -- Spotify Premium subscribers and advertisers on Spotify’s Free tier. Roughly two-thirds of this money is paid out to music rights holders. They generated about $11 billion in revenue in 2021 and paid out $7 billion