Spotify has updated its ‘Loud & Clear’ website with some new figures on its payouts to rightsholders, as well as the amount of royalties being generated by musicians on its service.
The site originally launched in March 2021, before being updated in March 2022, so this is its second annual refresh.
Before you read on, here are some key takeaways. Spotify’s lifetime payouts to the music industry are nearly $40bn. Its payouts to publishing rightsholders doubled in 2022. And 200,000 artists account for 95% of its payouts, but just 15% of its daily track uploads.
Now to the detail, starting with the big figure: $40bn of payouts. Well, “approaching” $40bn – the milestone wasn’t quite hit in time for ‘Stream On’. This is money paid to labels, publishers, distributors and collecting societies since Spotify launched in 2008.
This isn’t a huge surprise. In its recent annual report, Spotify revealed that it had reached €34bn of lifetime payouts by the end of 2022 – around $35.86bn at current exchange rates.
As in previous years, the Loud & Clear update drills down into the royalties being generated by artists on Spotify – albeit paid out to their rightsholders or distributors rather than directly to the artists.
1,060 artists generated Spotify payouts of more than $1m in 2022, and the company draws a comparison with 2017, when only 460 reached that level.
A less positive comparison is to 2021 when there were 1,040 of these Spotify millionaires in payout terms. This tier thus only grew slightly in 2022 to 1,060 artists. (Update: Spotify says this is partly due to currency volatility: its explanation of that is here.)
One tier that is growing faster, however, is the one for artists who generated more than $10k of annual payouts to their rightsholders from Spotify. 57,000 artists reached that level in 2022, up from 52,600 in 2021. More than a quarter of these artists are DIY: releasing through a distributor.
More than 10,000 artists generated more than $100k of Spotify payouts in 2022, up from 9,500 in 2021 and 4,300 five years ago. On the site, Spotify makes a point of saying that this tier includes artists from more than 100 countries.
That global aspect is returned to elsewhere in the site when Spotify reveals that nearly 35% of the artists generating annual payouts of more than $10k from its service live outside the 10 biggest countries for recorded music as ranked by the IFPI.
Critics often take these figures and compare them unflatteringly to minimum / living wages. Spotify is clearly sensitive to that point of attack, and suggests on the site that these artists “likely generated 4x this revenue from recorded music sources overall, with ticket and merch income on top of that.
(The 4x part is based on Spotify’s estimated 20% share of global music revenue. “For a rough estimate, you can multiply the Spotify revenue by four to approximate how much artists generated from all recorded revenue sources in 2022,” it explains. We’re not sure why this is 4x and not 5x, however!)
The 2023 ‘Loud & Clear’ update also makes a pitch for the long tail of Spotify’s payouts, with a slide highlighting the fact that the 50,000th highest-earning artist on Spotify in 2022 generated $12,584 of payouts – compared to $2,840 for the 50,000th artist in 2017.
“As a point of comparison, a radio station typically plays a rotation of the Top 40 songs, while even the largest record store in the heyday of physical record sales, carried the music of a few thousand artists,” is the context Spotify offers for this data.
That said, there’s also a slide revealing where that long tail’s boundaries might be. Spotify estimates that there are around 200,000 “professional or professionally aspiring recording acts” on its service – the same stat as announced last year – and that these artists only accounted for 15% of its daily track uploads, but generated 95% of its royalty payouts.
This figure is worth further attention in the days ahead, given recent claims by major labels that 100,000 new tracks are uploaded to streaming services every day, and rumblings – from Universal Music Group in particular – over finding a new model to rethink the economic model in favour of (in UMG boss Sir Lucian Grainge’s words) “artists whom fans value and seek to support”.
Elsewhere in the ‘Loud & Clear’ refresh, there’s a new figure for Spotify’s payouts to publishers and collecting societies: more than $3bn over the last two years. Last year, it said that it had paid out more than $1bn to these entities in 2021, which suggests that payouts doubled in 2022.
The company also says that more 281,000 songs were streamed over a million times in 2022.
Finally, a stat about heritage artists, which Spotify defines here – and this may make some readers suddenly feel a pang of age – as anyone generating 80% of their streams from tracks that are more than five years old.
Nearly 3,000 of these ‘heritage’ artists generated more than $100k in Spotify payouts in 2022. Some artists in this category have been among Spotify’s fiercer critics over payouts, so you can interpret its publishing of this figure as its latest nudge suggesting that catalogue artists’ disappointment with their streaming incomes may be more about their label deals.
As ever, ‘Loud & Clear’ is a piece of data storytelling, and the story being told is that Spotify is marvellous. The figures and comparisons are carefully chosen to reflect how the streaming services wishes to be perceived.
That doesn’t mean it’s pure propaganda though. It’s a useful insight into this corner of the streaming economy – that ‘200,000 professional or professionally aspiring artists’ figure is an example of a stat that is genuinely helpful when trying to crunch the numbers around streaming and the music industry.
‘Loud & Clear’ also offers some lines for critics to read between, and other stats to challenge or pull apart, which we expect to see happening in the coming hours and days.
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