Spotify’s annual report on music economics is now out, and the most recent Loud & Clear claims the music business is rising at a wholesome tempo.
But it surely’s all the time price studying these items with some skepticism. What’s good for “the music business” might be very totally different from what’s good for particular person artists.
So let’s have a look at Spotify’s headline numbers and ask ourselves what they imply, if something, for our personal music.
Spotify paid $9b to rights-holders in 2023
This set the file for the best fee to the music business from any single retailer, with at the least $4billion going to publishers and songwriters.
That $9billion annual payout determine has practically tripled over the past six years.
However after all it ought to! Extra individuals are streaming music. Much less individuals are buying CDs and downloads.
And, right here’s one other issue: Extra individuals are creating and distributing music than ever earlier than. The actual query for rising artists isn’t how a lot did Spotify pay “the business,” however quite, “how is that sum being divided?”
That being mentioned, kudos to Spotify for paying out extra within the combination than another DSP!
The variety of artists producing income on Spotify has tripled since 2017
This determine both sounds encouraging or inevitable, given the angle. With elevated streaming adoption, one hopes that probably the most in-demand artists inside a quickly increasing catalog would share within the progress advantages.
However to state the apparent: Extra artists making more cash is an effective factor. And final yr, 66k artists made at the least $10k from Spotify.
One other stat confirmed that half the artists who generated at the least $10k in 2017 at the moment are incomes at the least $50k.
My query right here is: Wouldn’t that “$10k+ in 2017” cohort embody EVERY well-known artist with a well-established profession as much as that time? So it shouldn’t be stunning that half of them nonetheless did properly in 2023, benefiting from the expansion of streaming total.
It’s like saying “See, there have been numerous well-known folks in 2017, and at the least half of them are nonetheless profitable! Oh, perhaps there have been just a few indies in that blend too.”
Music is world, and so is the music financial system
Over half the artists incomes greater than $10k yearly from Spotify are from non-English-speaking markets.
It’s an more and more world music market for each listeners and creators.
No complaints there!
Half of Spotify’s payouts went to indies
$4.5billion was paid to unbiased labels and DIY musicians from Spotify final yr.
That determine is up 4x from 2017.
That is one other determine that sounds nice, however I’d need to know just a few extra issues earlier than admitting it as proof of a wholesome business.
As an illustration, how precisely do they outline “indie label?” It might comprise some very notable artists.
And what concerning the loooooooooooooooooooooong tail? Okay, payouts to indies went up 4x in 6 years. However how a lot did the “indie” catalog develop in that very same length?
And that doesn’t even account for royalty adjustments that can demonetize an enormous proportion of the lengthy tail catalog in 2024.
$4.5billion to indies IS a file quantity although. So, cool.
Most Spotify millionaires are NOT stars
Attempt as I could to be cynical about this one, it simply looks like simple excellent news.
Spotify says:
Within the streaming period, the charts aren’t large enough to comprise the entire artists discovering success. Followers’ tastes are extra numerous, and the royalty pool is more and more large ($9B+!) – which suggests extra income to a wider vary of artists. You’d be stunned to see the artists who generated one million {dollars} on Spotify final yr. Many aren’t family names and didn’t want a “hit” tune to have an enormous yr.
Of the 1,250+ artists who generated $1M+ from Spotify alone – and sure over $4M throughout all recorded income sources – over 1,000 of them didn’t have a single tune that reached Spotify’s International High 50 all yr.
This record is not only traditional, generation-spanning artists. The vast majority of the artists producing $1M+ began their careers in 2010 or later.
80% of the artists who earned greater than $1million from Spotify didn’t actually have a tune within the High 50 of Spotify’s Every day International Songs Chart.
Spotify’s Loud & Clear affords a clunky metaphor as an example why they’ve demonetized a large portion of their catalog in 2024, rendering tracks nugatory which have lower than 1000 streams on a 12-month rolling foundation.
Should you’re not one of many high 225k “rising & skilled” artists on the platform, perhaps you must consider your self as an aspiring footballer! A dreamer from the glut.
Or to cite Spotify instantly:
Extra artists are succeeding and, because of this, much more are thinking about changing into artists. Certain, greater than 10 million uploaders have at the least a single observe on Spotify, however on the subject of constructing monetary alternatives, we’re targeted on these most depending on streaming as a part of their livelihood: these 225,000 rising {and professional} artists which can be constructing careers.
As a degree of comparability, FIFA estimated there are a whole lot of tens of millions of people that self-identify as “footballers,” however 128,694 individuals are really getting paid any amount of cash from it. Whereas music and sports activities are fairly totally different, this demonstrates how widespread the aspiration is to take part in artistic and athletic pursuits and make a dwelling from them.
One other method to consider it: The ten+ million uploaders on Spotify are akin to the tens of tens of millions who’ve uploaded at the least a single video to YouTube, typically simply to share one thing they get pleasure from with the world. The variety of creators making an attempt to construct a profession as a video creator is far smaller.
Okay, my mind stopped working after I heard a sports activities analogy, however lemme simply put it this fashion:
If I’m a musician, with 100 totally different tracks on Spotify that every generate 999 streams from precise followers, do I deserve actually nothing?
Oh, really, nevermind. I suppose I deserve a condescending metaphor.
To be clear, as an artist myself, I’ve some tracks on Spotify which can be properly above the monetization threshold, and a few tracks that aren’t. I’ll earn extra from the previous and nothing from the latter. In relation to my very own earnings, I don’t care that a lot. It may be a wash.
However on behalf of artists who’ve small however REAL audiences, I do take this personally. Particularly once we reside in an age of instantaneous entry and strong digital accounting that COULD simply as simply monetize music streams per-usage, no matter total streaming quantity.
Know the way I do know? As a result of that’s precisely how Spotify’s accounting already labored for greater than a decade.
Nearly 330,000 songs had been streamed greater than one million instances…
… however it takes MORE streams than it used to to be able to stand out from the pack as a dominating artist on Spotify.
With extra customers, stream-counts for widespread songs are larger than ever.
How do you stack as much as the best-performing artists on Spotify?
Conclusion
Lest I sound overly strident or jaded, lemme be clear: I really like Spotify.
I’m a long-time subscriber.
The corporate has finished greater than nearly another digital music service to empower artists — ESPECIALLY rising artists — giving them instruments and entry to form their music’s future to some extent on the platform.
They pay one thing like 70% of their income to rights holders yr after yr, regardless of working at a loss for the majority of their existence. I’ve been a vocal defender of Spotify’s royalty mannequin up to now, on condition that they’re an audio-only service locked in fierce competitors with giants like Apple, Amazon, and Google, all of whom have the luxurious of providing music streaming as a loss-leader when obligatory.
Plus, Spotify options comparable to playlisting and Discovery Mode have helped my music attain a whole lot of hundreds of listeners I by no means might’ve reached by myself.
However c’mon! It may also be true that some of these stories are (propaganda?)… selective.
It’s attention-grabbing propaganda, for certain. And many these numbers do recommend the business is rising. However you’re not the business. You’re an artist.
Which is why I needed to take a more in-depth have a look at these cherry-picked knowledge factors.
The numbers need to present that nearly everybody — labels, distributors, the listeners, the “actual” artists, Spotify itself — is doing properly.
Everybody’s doing properly, they declare. Besides footballers.