Spotify Paid out US$10 Billion to the Music Industry In 2024
While the debate on the streaming model shows no signs of dying down, Spotify has a flex of its own.
The streamer busted a benchmark in 2024 by paying out $10 billion to the music industry, an all-time high. That’s the highest annual payment to the music industry from any single retailer, writes Spotify’s VP and head of music David Kaefer, in a blog post.
Accumulatively, the digital music specialist has paid out nearly $60 billion to its content providers since its commercial launch in 2008, according to a statement issued overnight.
Meanwhile, the company boasts more than 500 million paying listeners across all music streaming services, and, realistically, is targeting 1 billion with the last 10 years as its guide.
Also, Kaefer outlines how Spotify is helping to grow artists’ careers beyond just the superstars. To illustrate this, roughly 10,000 artists generated at least $10,000 on Spotify in 2014. Today, over 100,000 artists earn more than $100,000 each year from the platform.
Spotify is often singled out for the paltry royalties it passes on to creatives. The debate reached fever pitch in 2023 when the brand announced it would begin eliminating payments for songs with less than 1,000 annual streams, part of an update of its royalty system that would funnel more money to more popular artists, record labels and distributors, while apparently clamping down on streaming fraud.
Spotify isn’t the bad guy in the picture, reckons Kaefer. The Spotify exec points to the dark days of 2014, when, after a long, slow decline, the downloads business was atrophying, CDs were largely unwanted, and the music business posted global recorded music revenues of just $13 billion.
That $10 billion generated last year by Spotify is essentially new money, funds that didn’t exist prior to the streaming revolution.
“Without a doubt, this has been a decade of unparalleled transformation. The global value of music copyright today sits at $45.5 billion. A decade on from its low point, how many other industries have experienced this kind of revival?”, he writes.
“Our goal is to help artists get their work in front of existing and future fans, continue to innovate on their behalf, and deliver it in a way that inspires people to pay for it. Onboarding people to paid streaming is precisely what has increased our payouts—tenfold—over the past decade”.
The “freemium” tier is a proven winner, notes Kaefer. “Beyond the ad dollars this generates”, he adds, “more than 60% of Premium subscribers were once free tier users”.
Looking ahead, the target of reaching 1 billion paid subscribers across all streaming services “will be a collaborative effort, requiring innovation, strategic partnerships, and a continued focus on delivering exceptional value to music fans worldwide. It’s a goal we’re confident we can achieve together”.
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