The Brag Media ▼
News March 25, 2022

Over 1,000 artists are now making more than $1 million from Spotify alone

Senior Journalist, B2B
Over 1,000 artists are now making more than $1 million from Spotify alone

Spotify has revealed more details about the royalties it paid in the 2021 calendar year.

The update comes as part of the streaming giant’s ‘Loud & Clear’ campaign, which it launched in a bid to provide more transparency and accountability to the music streaming economy.

The Loud & Clear platform launched last year as the #JusticeAtSpotify movement was ramping up.

The #JusticeAtSpotify protests called on Spotify to adopt a user-centric payment model and show more transparency by making all closed-door contracts public.

At the time of Loud & Clear’s launch, Spotify declined to comment on the movement, but noted the data-heavy platform had been in the works for some time, regardless of the negative sentiment in the market.

And now, one year on, it’s released more figures “showing further meaningful progress towards a more healthy and diverse music industry”.

The figures show that in 2021, Spotify paid US$7 billion to the music industry, setting the record for the highest annual payment for any single retailer in history.

Indeed streaming revenue alone in 2021 exceeded total industry revenue in each year from 2009 to 2016, highlighting the massive jump in recent years.

Spotify said streaming has enabled individual artists to go from ‘zero to career’ faster than any time in history, and noted that over 28% of the 50,000-odd artists who generated over $10,000 from Spotify self-distribute on the platform. Plus, 34% of the artists who generated more than $10,000 on Spotify live in countries outside the top 10 music markets.

“Streaming has lowered the barriers to entry to music and accelerated the path to finding a global fan base – meaning artists can go from first single to first significant pay cheque fast,” it said.

“Over 10% of artists (5,300) who generated more than $10,000 on Spotify in 2021 released their first song ever in the last two years. In 2021, 350 of them generated $100,000 from Spotify alone.”

Climbing further up the earning scale, 1,040 artists generated over $1 million on Spotify in 2021. This was up over 20% from 2020’s 860 artists. Back in 2017, just 460 artists generated over $1 million from the streaming giant. This climbed to 590 in 2018 and 720 in 2019.

Spotify said it believes these figures will only increase, and has introduced new metrics to reflect this.

“When artists hit new heights, it’s time to launch additional milestones,” it said.

“New to the site in 2021, since so many artists have far surpassed the $1 million level, we’ve added $2 million and $5 million data to our site.

“In 2021, 450 artists generated more than $2 million on Spotify – an increase of 100% in five years – and 130 artists generated over $5 million – an increase of 160% in the same period.”

Despite the limited number of artists on Spotify’s top tier, it said the industry during the height of the CD era favoured ‘superstars’ twice as much as now.

“More artists are sharing in today’s thriving music economy than ever before,” it said.

“In the peak of the CD era, nearly 25% of US album sales were accounted for by the top 50 artists. On Spotify in 2021, only 12% of US streams were of the top 50 artists – meaning that revenue opportunities now reach far beyond the superstars.”

At the business end of town, Spotify noted that major record labels earned over $4 billion in profit in 2021, which was “driven by streaming”. It said these record profits could be reinvested to grow the industry.

Spotify also said songwriters and producers – via their publishing rights holders – were generating record revenues thanks to streaming.

It paid out more than $1 billion to publishing rights holders for the second year running.

Last year at launch, Spotify’s local head of music, Alicia Sbugnera, said musicians power Spotify, and they sit at the core of the business.

“So it is only right for artists to be informed on our business model and how it can positively impact their careers,” she explained to TMN.

“I have been at Spotify for six years and in this time, questions about royalties have been in consistent and high demand, and in many ways, we feel we’ve been too quiet on the topic. By transparently providing this data, we hope to increase trust with the creator community. There are important questions that need to be answered and the site will increase transparency by sharing new data and information on the global streaming economy, but also quite significantly, provide a valuable foundation for a constructive conversation at both a local and global level,” she said.

Spotify’s CEO, Daniel Ek, said Spotify’s ultimate goal is to help musicians make a living.

“It’s something we take seriously every day. Of course not every one of the millions of artists on Spotify have found the same success. That will never be true. Fans will ultimately decide who succeeds and thrives, but our focus remains clear: Continue to create more opportunities for more artists to reach more fans,” he says in a note on the new platform.

“We know we have much more work to do, but we’re confident in what we’ve built and the innovations we continue to deliver for artists and their fans. We’ll continue to empower the most talented artists in the world to turn their passion into a profession, grow the money paid to rights holders, diversify and expand the number of professional artists succeeding, and propel the music industry forward.”

* All figures are in US dollars 

Jobs

Powered by
Looking to hire? List your vacancy today!

Related articles