Spotify just revealed its Annual Music Report and the streaming giant just had its best year ever, paying out $10 billion to rights holders with more musicians regularly earning their living through Spotify streams and more music millionaires being created than ever before.
Yes, surprise surprise, Spotify has just enjoyed another record-breaking year and now, more than ever it seems, it's keen to spread the word and keep the industry on message.
Because, by its numbers at least, it’s great news all round.
Welcome to Spotify’s annual Loud & Clear Annual Music Report, a welcome, fact-packed, Spotify-approved breath of fresh air into the streaming story - its once-a-year chance to politely scotch the rumours and (we secretly suspect) put the nay-sayers back in their box.
This is Spotify clearly stating what it is it does, what it can control, and what – through no fault of its own – it can’t. So while $10 billion leaving the company is an amazing number, the company is keen to stress that this is the sum heading to music rights holders who may not always be the musicians themselves…
There’s a catch?
The fact remains that if you're a band who signed away rights to your music, you're probably not feeling the Spotify love in the way that it would like.
Spotify has no visibility on just how much the owners of your music are contractually entitled to then pass on to you. And with all such contracts on a case-by-case basis, it’s easy to see where confusion and anti-Spotify sentiment can arise.
Host for this year's reveal was Head of Artist & Industry Partnerships, International at Spotify, Bryan Johnson who was at pains throughout to explain how Spotify shares out money according to “streamshare” – being a percentage of the total number of streams being delivered – rather than the much-quoted (and non-existent and case-by-case inconsistent) “per stream” rate often used to beat them with.
But with the music streaming service market now having 500 million paying users, with “one billion within reach”, this share of the money – at least on paper – looks set to only ever get bigger.
“Spotify has been on a mission to get the world to value music again – and the system we've built together is working,” he said.
Get the message?
It’s safe to say that Spotify hasn't always had great press, and ongoing issues and doubts surrounding just where all of Spotify’s incoming cash ends up after it leaves the pockets of its increasingly dependent and streaming-friendly consumers goes, refuse to go away.
And with CEO Daniel Ek making more money than any recording artist in history, it’s not really a good look to anyone wanting to make sure their favourite (perhaps niche and struggling) artist gets paid and continues to make the music they love.
Highlights on board the new report – alongside that $10 billion payout – include the fact that payouts have increased tenfold over the past 10 years. That, it claims, has fuelled a “more than 2x increase” in music revenue over the same period. Think streaming is killing music? Not so, Spotify insists.
“Thanks to streaming, more artists than ever before are generating royalties at every career stage, more than at any time in music history," said Johnson.
"Likewise it’s been a great year for songwriters, with Spotify paying out nearly $4.5 billion to publishing rights holders. Our 2024 publishing payouts saw double-digit-percentage growth compared to 2023."
More artists, making more music, making more money
And the number of artists generating royalties has tripled since 2017, with the number of artists with at least one track on Spotify increasing even more.
And the potential for those tracks to earn their makers serious money just keeps getting better.
For example, the report highlights that in 2014 one millionth of the streamshare – i.e. one millionth of the total cash that Spotify pays out, would pay that creator $1000. Now, in 2024 that same one millionth would earn you $10,000.
And – in a slide neatly entitled ‘New Music Millionaires’ there are now 1,500 artists earning over $1 million annually from Spotify. And – interestingly and highlighting the diversity and range of Spotify’s reach – more than 80% of those million dollar earners DIDN’T have a song that reached the Spotify Global Daily Top 50 chart.
Think that it’s just the same big names making all the money? Think again.
It’s all fascinating and perhaps surprising stuff.
We’ll be going in deep with the report and revealing more facts, but suffice to say that on the merit's of today's report, Spotify is serious, isn’t going anywhere and, if you’re willing to get on board, cut out the middleman and play its game (AND if you’ve got the talent and drive to push your music hard) there are big bucks to be made.
