Spotify has updated its “Loud & Clear” website which aims to provide more transparency on how much rightsholders receive from Spotify. It’s important to note with all of these findings that the figures thrown are paid to the rights holders, not necessarily the artists themselves. The various intermediaries such as labels, publishers and PROs can be vital to the process at a fair pace and sometimes 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, but not all of that money went to the artist. There was a 120% increase in catalogs that generated $10,000 in revenue for rights holders on Spotify alone, from 23,400 to 52,600.
The number that everyone always wants is the pay-per-view stream. According to the website’s FAQ (which is worth reading as it has a lot more information), Spotify says that since “fans don’t pay per song and no major streaming service pays per stream, so we don’t think a ‘par-stream rate’ is a meaningful number to analyze. It’s a serious nuance at SoundCloud, which launched user-centric payments for a number of artists last year.
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They recognize that payments per stream seem weak and that’s for three reasons. The ad-supported level pays less, Spotify’s prices in other markets (i.e. not rich countries in Europe and North America) are lower to encourage Spotify’s growth and therefore have lower payouts, and high engagement and streaming numbers per user.
There are plenty of songs that generate a lot of money. 718,000 songs surpassed one million streams, while 238,000 songs reached one million streams in 2021 alone. Over 230 songs even reached one billion streams.
Big artists and majors still dominate. On Spotify in 2021, 12% of US streams came from the top 50 artists. In 2021, over 28% of artists who have made over $10,000 from Spotify are self-distributing and 34% live in countries outside of the top ten music markets. The majors recorded more than $4 billion in profits in 2021.
There are eight million profiles on Spotify, but only 165,000 artists have released ten or more all-time songs and average at least 10,000 monthly listeners.
According to the website, Spotify earns money primarily from two sources: Spotify Premium subscribers and Spotify Free Tier advertisers. About two-thirds of that money goes to music rights holders. They generated around $11 billion in revenue in 2021 and paid out $7 billion