Spotify has shared detailed insights into the record $9 billion payout it made to the music industry in 2023, a significant increase from previous years. The company highlighted that this amount has nearly tripled over the past six years, contributing to the $48 billion-plus total payments made since its inception.
Last March, Spotify disclosed that it allocates nearly 70% of its music-generated revenue back to the industry. This revenue is sourced from subscription fees from its Premium platform subscribers and advertising fees from its Free tier. The recipients of these payments include record labels, publishers, independent distributors, performance rights organizations, and collecting societies.
It is crucial to note that all payments are directed to rights holders first, typically record labels, which then distribute the earnings to artists and songwriters based on their contractual agreements. The artists' and songwriters' shares are determined by their deals with these rights holders, not by the streaming service itself.
In its recent announcement on the Loud & Clear website, Spotify revealed several key points:
- The number of artists earning at least $1,000,000, $100,000, and $10,000 on Spotify has nearly tripled since 2017.
- DIY artists and those signed to independent labels collectively generated nearly $4.5 billion on Spotify in 2023, marking a significant increase from previous years.
- More than half of the artists earning at least $10,000 on Spotify come from non-English speaking countries, with various languages such as Spanish, German, Portuguese, French, and Korean leading the way.
- Spotify paid out $4 billion to publishing rights holders over the last two years, benefiting songwriters and related entities significantly.
- Notably, 80% of the artists who earned over $1 million on Spotify in 2023 did not have a hit song, showcasing the platform's support for emerging talents.
Spotify continues to dominate the music streaming industry globally, with the U.S. being its largest market. The company reported a substantial increase in total monthly active users and Premium subscribers in the fourth quarter of 2023, solidifying its position as the leading paid music-streaming service.
