(Hypebot) — Spotify’s new Loud & Clear transparency report shows payments to the music industry of $10 billion in 2024, half of which went to independents. It’s the first L&C since Liz Pelly’s expose of streaming and the inner workings of Spotify as well as significant changes in who the streamer pays and how payments are calculated.
With $10 billion in payouts, Spotify is by far the largest contributor to the $28 billion in overall streaming revenue driving the music industry. 0.25% of Spotify’s payments came from royalties that would have gone to artists that don’t meet new thresholds.
Global Fandom
Increasingly these revenue payments are spread across the globe.
Last year, artists who generated at least $100,000 in royalties were recording music in 50+ languages and artists who generated at least $1 million on Spotify recorded music in 17 languages. In 2017, only English and Spanish reached that threshold.
The same is true for smaller artists.
More than 50% of the artists who generated at least $1000 in royalties on Spotify in 2024 made the majority of their earnings from listeners outside their home country. Around one-third of those saw more than 75% of their royalties come from outside their home countries.
A Fortunate Few
Spotify often says that it has helped level the playing field for artists at every stage of their careers, and since 2017, the number of artists generating between $1,000 and $10 million annually has tripled.
Female artists generating more than $1 million annually have quadrupled since 2017. Markets like Canada, South Korea, Sweden, and Argentina see particularly strong female representation amongst their top artists.
Big hits don’t seem to matter like the once did. More than 80% of Spotify’s top-royalty generating artists failed to land in its Global Daily Top 50.
But globally just 12,500 artists generated over $100,000 in 2024 on Spotify.
Loud & Clear Through A New Lens
Spotify’s 2024 Loud & Clear report is the first since it stopped paying any royalties on tracks that did not have least 1,000 streams in the previous 12 months.
That, Spotify tells Hypebot, resulted in $25 million being added to the royalty pool for tracks that did exceed the threshold.
Cutting off payments to an estimated 100 million underperforming tracks added 0.25% to Spotify’s $10 billion royalty pool last year.
That doesn’t seem like the major victory that UMG CEO Lucian Grainge sought in his war against “merchants of garbage” music.
Last year, UMG and other rightsholders also renegotiated their broader deals with Spotify. Exactly when they took effect and how else they shifted payments is leas clear.
It’s also unclear how the accusations in Pelly’s book of ghost tracks and other behind the scenes practices – most of which Spotify has denied – affected the revenue paid to artists and rightsholders.
Pundits have repeatedly tried and failed to use the numbers in the yearly Loud & Clear to extrapolate an estimate of per stream payouts to artists. Too many variables and varied middle men make drawing meaningful conclusions impossible.
But it is (loud and) clear that while artists express concerns about the money they earn from streaming, Spotify co-founder and CEO Daniel Ek cashed out $700 million in stock since 2023 and co-founder Martin Lorentzon solf $556.8 million in shares in 2024 alone, according to an analysis by Music Business Worldwide.
Bruce Houghton
