Musicians aren’t thrilled with Spotify – they say the streaming platform undervalues their work and they deserve to be paid more per stream. So today Spotify is trying to address those concerns with a new website called Loud & Clear, which offers more information about how much the platform pays artists and how that money is distributed. The site also includes a calculator so artists can see where their work ranks on Spotify, such as how a song with 100,000 all-time streams would only appear in the platform’s top 2,710,000 tracks.
Notably, the company claims to have paid over $23 billion in royalties to rightsholders, including over $5 billion in 2020, up from $3.3 billion in 2017. It also notes that there are 1, 2 million artists with over 1,000 listeners on the platform – it doesn’t say how many artists there are in total – and that 15%, or 184,500, of their catalogs have generated recording royalties and publishing of at least $1,000. (These payments do not go directly to the artists and are instead paid to their rights holders, such as distributors or record labels, who then refer to the contracts they have with the artists to pay them. This means that the artists probably didn’t get the full $1,000 from their Spotify streams.) At the high end, only 870 artist catalogs generated $1 million or more in royalties.
You can play around with the website to see all the data, and if you have any questions about how streaming royalties work and how the company calculates how much to pay rightsholders, there’s a video at this subject. I embed it below.
Spotify’s increased focus on transparency comes at a time when a few of its competitors are experimenting with new ways to pay artists. Earlier this month, SoundCloud announced that it would pay independent artists based on their actual listeners, rather than a share of overall streams. So a SoundCloud subscriber’s subscription fee or ad revenue is split among the artists they actually listen to, rather than going into a big pot and being split and shared with the most popular artists in the platform, like Spotify.
In a conversation with The edge, Charlie Hellman, vice president and chief market officer of Spotify, noted that the company’s internal research does not suggest that this model would significantly change the types of artists who succeed, but that if the industry decides to moving towards change, Spotify would be “open” to it.
Maybe the transparency will help artists feel that Spotify isn’t just profiting from their work, but it’s hard to imagine that being the case. Spotify, to its credit, has tried to make it easier for artists to profit directly, with features like a tip jar and the ability to sell merchandise and concert tickets through the platform. But how many artists have earned from these features isn’t detailed on this new website, and the website makes it clear that hundreds of thousands of artists are earning far less than a living wage from the platform’s streams. -form.