Spotify’s annual report on music economics is now out, and the most recent Loud & Clear claims the music trade is rising at a wholesome tempo.
But it surely’s all the time price studying this stuff with some skepticism. What’s good for “the music trade” might be very totally different from what’s good for particular person artists.
So let’s take 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 document for the best fee to the music trade from any single retailer, with not less than $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 trade,” however slightly, “how is that sum being divided?”
That being mentioned, kudos to Spotify for paying out extra within the mixture than every other 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 essentially the most in-demand artists inside a quickly increasing catalog would share within the progress advantages.
However to state the apparent: Extra artists making extra money is an effective factor. And final 12 months, 66k artists made not less than $10k from Spotify.
One other stat confirmed that half the artists who generated not less than $10k in 2017 are actually incomes not less than $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 nicely in 2023, benefiting from the expansion of streaming general.
It’s like saying “See, there have been plenty of well-known individuals in 2017, and not less than half of them are nonetheless profitable! Oh, perhaps there have been a number of 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 impartial labels and DIY musicians from Spotify final 12 months.
That determine is up 4x from 2017.
That is one other determine that sounds nice, however I’d wish to know a number of extra issues earlier than admitting it as proof of a wholesome trade.
As an illustration, how precisely do they outline “indie label?” It could comprise some very notable artists.
And what in regards to 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 period?
And that doesn’t even account for royalty modifications that may demonetize an enormous proportion of the lengthy tail catalog in 2024.
$4.5billion to indies IS a document quantity although. So, cool.
Most Spotify millionaires are NOT stars
Attempt as I’ll to be cynical about this one, it simply looks like simple excellent news.
Spotify says:
Within the streaming period, the charts aren’t sufficiently big to comprise all the artists discovering success. Followers’ tastes are extra various, and the royalty pool is more and more large ($9B+!) – which suggests extra income to a wider vary of artists. You’d be shocked to see the artists who generated 1,000,000 {dollars} on Spotify final 12 months. Many aren’t family names and didn’t want a “hit” tune to have an enormous 12 months.
Of the 1,250+ artists who generated $1M+ from Spotify alone – and certain over $4M throughout all recorded income sources – over 1,000 of them didn’t have a single tune that reached Spotify’s World High 50 all 12 months.
This record isn’t just basic, generation-spanning artists. Nearly all 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 also have a tune within the High 50 of Spotify’s Day by day World Songs Chart.
Spotify’s Loud & Clear gives a clunky metaphor as an instance 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.
When you’re not one of many high 225k “rising & skilled” artists on the platform, perhaps it is best to consider your self as an aspiring footballer! A dreamer from the glut.
Or to cite Spotify instantly:
Extra artists are succeeding and, consequently, much more are keen on changing into artists. Certain, greater than 10 million uploaders have not less than a single observe on Spotify, however with regards to 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 some extent of comparability, FIFA estimated there are a whole bunch of tens of millions of people that self-identify as “footballers,” however 128,694 individuals are truly getting paid any sum of money from it. Whereas music and sports activities are fairly totally different, this demonstrates how widespread the aspiration is to take part in inventive and athletic pursuits and make a residing 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 not less than a single video to YouTube, typically simply to share one thing they take pleasure in with the world. The variety of creators attempting to construct a profession as a video creator is way smaller.
Okay, my mind stopped working once I heard a sports activities analogy, however lemme simply put it this manner:
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, truly, nevermind. I assume I deserve a condescending metaphor.
To be clear, as an artist myself, I’ve some tracks on Spotify which can be nicely 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 is perhaps a wash.
However on behalf of artists who’ve small however REAL audiences, I do take this personally. Particularly once we dwell in an age of immediate entry and strong digital accounting that COULD simply as simply monetize music streams per-usage, no matter general 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.
Virtually 330,000 songs have been streamed greater than 1,000,000 instances…
… however it takes MORE streams than it used to so as to stand out from the pack as a dominating artist on Spotify.
With extra customers, stream-counts for fashionable songs are greater 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 like Spotify.
I’m a long-time subscriber.
The corporate has carried out greater than virtually every other digital music service to empower artists — ESPECIALLY rising artists — giving them instruments and entry to form their music’s future to a point on the platform.
They pay one thing like 70% of their income to rights holders 12 months after 12 months, regardless of working at a loss for the majority of their existence. I’ve been a vocal defender of Spotify’s royalty mannequin prior to now, provided that they’re an audio-only service locked in fierce competitors with giants like Apple, Amazon, and Google, all of whom have the posh of providing music streaming as a loss-leader when mandatory.
Plus, Spotify options akin to playlisting and Discovery Mode have helped my music attain a whole bunch of 1000’s of listeners I by no means may’ve reached alone.
However c’mon! It may also be true that these kinds of stories are (propaganda?)… selective.
It’s fascinating propaganda, for certain. And plenty of these numbers do recommend the trade is rising. However you’re not the trade. You’re an artist.
Which is why I needed to take a more in-depth take a look at these cherry-picked knowledge factors.
The numbers wish to present that just about everybody — labels, distributors, the listeners, the “actual” artists, Spotify itself — is doing nicely.
Everybody’s doing nicely, they declare. Besides footballers.