Since 2021, Spotify has revealed its Loud & Clear report, corralling information factors to indicate how a lot cash is being earned by artists on the streaming service. There may be a lot discuss of “transparency” – maybe probably the most duplicitous phrase within the music business’s lexicon – however this yr’s report feels very totally different, coming because it does alongside the publication of writer Liz Pelly’s ebook Temper Machine, a studs-up assault on streaming economics generally and Spotify specifically.
Then there’s the unlucky timing of the information, as lately unearthed by Music Enterprise Worldwide, that Spotify co-founder and CEO Daniel Ek has cashed out near $700m in shares within the firm since 2023 whereas Martin Lorentzon, the corporate’s different co-founder, cashed out $556.8m in shares in 2024 alone. In the meantime artists scream of widening monetary inequalities and accuse streaming providers of doing higher from artists than artists are doing from streaming providers.
So there’s a wierd tang to the numbers being pushed as we speak, as Spotify declares its 2024 report. “We predict [the report] helps us contribute to the bigger understanding of what occurred in music the yr earlier than,” says Spotify’s Sam Duboff, who carries the unwieldy title of worldwide head of promoting & coverage, music enterprise. It does contribute in that approach, however solely to a degree.
Loud & Clear, identical to Spotify Wrapped every December, is a advertising device, trumpeting simply how incredible Spotify is. It proffers a number of speaking factors, the largest being that Spotify – which claims it holds 1 / 4 of the recorded music market globally – paid out $10bn in royalties final yr (and virtually $60bn in its lifetime).
Duboff says 2024’s report is “notably symbolic, as a result of it’s precisely 10 years after the low level of the recorded music business”, when downloads had didn’t fill the void created by the collapse of the CD market and the rise of piracy. He says Loud & Clear goals to indicate “what number of extra artists are capable of take part within the large royalty swimming pools” generated by streaming.
$10bn is a hefty quantity, but it surely must be carefully examined. This cash, round two-thirds of its whole revenue, is what Spotify has paid by to file labels and music publishers. Spotify can’t be held liable for egregious label and writer contracts, but it surely wants reiterating that solely a portion of that $10bn will make its technique to the individuals who wrote and recorded the music.
The corporate additionally says this $10bn is “greater than any single retailer has ever paid in a yr” and is “10x the contribution of the biggest file retailer on the peak of the CD period”. Which may be true, but it surely says much less about Spotify’s benevolence and extra about how streaming’s market share has principally consolidated into the palms of 4 world heavyweights – Spotify, Apple, YouTube and Amazon.
Don’t like these numbers? Spotify has others. Some land properly. Others, when contextualised, land like a cake flung from the highest of a skyscraper.
As with stay music, a handful of megastars are sponging up many of the cash. There at the moment are over 200 artists every producing over $5m a yr from Spotify, up from only one act a decade in the past; Duboff says the highest 70 acts are producing not less than $10m every.
We get a greater perception into the arduous scrabble for smaller artists when Spotify says its 10,000th-ranked artist generated $131,000 final yr – up from $34,000 a decade in the past – and that 1,500 acts every generated over $1m in royalties in 2024. This can be a heartening rise, however final yr, Spotify mentioned there have been 225,000 “rising or skilled recording acts” (its terminology) on the service globally. Meaning simply 4.4% {of professional} or near-professional acts stand an opportunity of producing not less than $131,000 a yr, whereas 0.6% are in with a shot of producing $1m or extra. A solo act at this stage could be inspired by the potential revenue, however a band with 4 or 5 members might want to closely depend on revenue from gigs and merchandise.
Spotify has asserted that 2024 was “one other file yr” for songwriters, with $4.5bn paid to music publishers (who distribute royalty funds to songwriters) over the previous two years. However given Spotify has been accused within the US, by the Mechanical Licensing Collective (MLC), of making an attempt to scale back its funds to songwriters by reclassifying its premium subscriptions as “bundles” as they include entry to audiobooks, this declare is not going to be warmly welcomed by everybody.
The MLC took authorized motion final Might however in January this yr a decide granted Spotify’s movement to dismiss the lawsuit. “The courtroom agreed that Spotify Premium’s definition as a bundle was correct,” says Duboff. “We added audiobooks, which has been an enormous worth to subscribers a yr or two in the past. All 4 main streaming providers function bundles and we’re no totally different.”
To Spotify’s credit score, it publishes this report yearly to permit everybody to select by a few of its (albeit fastidiously curated) numbers. Not one of the different streaming providers do that, and file labels most actually don’t.
“5 years in, we all the time pictured all of the streaming providers would begin reporting information like this,” says Duboff. “It’s a knowable truth how a lot every streaming service is paying out to the music business. And we expect artists need to know what the income alternative on every platform is. It’s loopy to me in 2025, with the quantity of knowledge accessible on the web, that there nonetheless is a lot that’s opaque within the music business.”
The music business creates and advantages from this lack of transparency. With out file labels and publishers revealing precisely how a lot of this cash flows to artists, Loud & Clear’s numbers really feel like fireworks despatched up to attract our consideration away from tombstones.
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