Spotify on Tuesday launched its annual Loud & Clear report, detailing details about the music streaming service’s royalty funds. Whereas Spotify revealed earlier this yr that it paid out $10 billion to the music business in 2024, the brand new report presents extra in-depth numbers about its funds in an effort to dispel reports that the corporate doesn’t reward artists correctly for his or her work.
For the primary time ever, an artist who obtained one in each million streams on Spotify generated over $10,000 on common in 2024, which is 10x what the identical streamshare would have generated a decade in the past, the report says.
Whereas Spotify is touting the quantity it has paid out to artists and songwriters, many are demanding honest compensation from the streaming service. Just a few weeks in the past, various Grammy-nominated songwriters boycotted Spotify’s songwriter of the year Grammy get together due to the music streaming service’s reducing royalties. Because of a change launched by Spotify final yr, Billboard has estimated that writers stand to lose about $150 million over 12 months.
As well as, a new report from Duetti (that Spotify has dismissed in a previous statement to TechCrunch) discovered that Apple Music nonetheless pays artists twice as a lot as Spotify. It discovered that Spotify paid artists $3.0 per 1,000 streams, whereas different platforms like Amazon Music, Apple Music, and YouTube paid $8.8, $6.2, and $4.8, respectively, per 1,000 streams in 2024.
Following the discharge of the report, Spotify informed TechCrunch that “These claims are ridiculous and unfounded,” and that “no streaming service pays per stream.”
Spotify’s new report makes an attempt to dismiss these stories and issues. The report particulars the corporate’s payout mannequin to clarify how artists and publishers earn income on its platform.
“Main streaming providers all calculate payouts the identical manner: primarily based on streamshare (if an artist’s catalog accounts for 1% of whole streams, it might earn 1% of whole royalties),” the corporate defined in its report. “Nonetheless, misconceptions about ‘per-stream charges’ stay widespread. Streaming providers don’t pay out primarily based on a set per-stream fee — identical to listeners don’t pay per track they take heed to.”
The Union of Musicians and Allied Employees’ (UMAW) has been calling for Spotify to pretty compensate artists, particularly impartial and smaller artists who’re struggling to make a dwelling. Congresswomen Rashida Tlaib and Congressman Jamaal Bowman final yr launched the Living Wage for Musicians Act in partnership with UMAW, detailing a proposal that goals to extend streaming royalties for musicians to at least one cent per stream.
“It’s simple to calculate what Spotify pays on to recording artists: $0,” a spokesperson for UMAW stated in an announcement to TechCrunch.
“There isn’t any direct fee to recording artists by Spotify, as a result of the corporate claims its method of streaming falls below no present regulation or requirement for direct funds to musicians — not like different digital platforms like satellite tv for pc radio, web broadcast, or ‘non-interactive’ streaming, all of which pay recording artists instantly. This wants to alter, clearly. UMAW helps the Dwelling Wage for Musicians Act to shut this loophole and make streaming pay the musicians who create the content material for Spotify and different platforms,” the assertion concluded.
Spotify’s report touts that its funds are getting higher, regardless of issues from the business.
The report reveals that the variety of artists producing royalties has tripled since 2017. A decade in the past, the highest artist on Spotify earned simply over $5 million, whereas immediately, greater than 200 artists have surpassed that milestone.
Over the previous decade, the ten,000th-ranked artist on Spotify has seen their royalties enhance virtually 4x – from $34,000 to $131,000, whereas the 100,000th-ranked artist has seen their generated royalties multiply by over 10x – growing from below $600 in 2014 to virtually $6,000 in 2024.
As well as, the corporate revealed that just about 1,500 artists generated over $1 million in royalties from Spotify alone final yr. Spotify notes that 80% of those artists didn’t have a track attain the Spotify International Day by day High 50 chart in 2024, which signifies that lots of them aren’t family names.
Spotify additionally shared that the artists who generated a minimum of $100,000 in royalties have been recording music in over 50 languages in 2024, whereas the artists who generated a minimum of $1 million on Spotify recorded music in 17 completely different languages.
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