Another one bites the dust
Of course, the internet changed everything. Compared to video files, audio files were considerably smaller… and they were easy to share online, kickstarting a 15-year dark period for the industry in which piracy crushed its income. Downloads — and for a weird few years, ringtones — offered some respite for artists and labels, but it wasn’t until the green shoots of streaming that the recorded music industry returned to real growth.
As more and more of us sign up to services like Spotify to enjoy our favorite songs on-demand, the income generated from streaming platforms has rocketed, with the Swedish streamer reporting more than $14 billion in revenue last year. But, despite its growth, Spotify has never reported a full year of net profit, and whether those revenues are flowing through to the maestros behind the music, remains a more complicated question.
Money, money, money
Artist remuneration has been a hot topic for Spotify almost since its inception, with top artists like Taylor Swift and Radiohead’s Thom Yorke temporarily taking their songs off the service in past years and raising questions around how the company structures its royalties.
Spotify has been pretty fixed in its response to criticism from disgruntled bands and artists, often pointing to the billions of dollars it hands over to music makers each year. Indeed, Spotify reportedly paid some $9 billion to rights holders (artists, labels, publishers, distributors etc) in 2023, taking its lifetime total to more than $48 billion.
Harmony... or discord?
Those figures are from the company’s latest Loud & Clear report, which also revealed that the number of artists meeting various monetary milestones like $10k+ annual earnings has nearly tripled over the last 6 years, with some 1,250 musicians now making more than $1 million from Spotify streaming alone.
It’s worth noting, however, that with as many as 9.8 million artist profiles on Spotify according to some estimates, the 11,600 artists who are managing to make it to that $100k threshold represent a miniscule share of the overall talent on the platform, and that those figures represent payments to rights holders — not necessarily what ends up in artists pockets. Depending on individual arrangements, most will be split to varying extents with agents, labels and publishers.
