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Spotify Accounts For 20% Of All Recorded Music Income

Spotify has released its annual Loud and Clear report, which it launched last year with the goal of “increasing transparency” around its payment plans.

The report usually buries the actual news in light of self-congratulatory stats, such as framing the US$7 billion in royalties it paid out in 2021 as “the largest sum paid by one retailer to the music industry in one year in history — including any single retailer at the height of the CD or digital download era.”

Spotify also crowed that over 52,600 artists earned more than $10,000 from Spotify in 2021, with 130 paid more than $5 million.

These aren’t good stats. Especially when you parse the numbers further:

  • $10,000 – $49,999: 36,100 artists
  • $50,000 – $99,999: 7,000 artists
  • $100,000 – $499,999: 7,330 artists
  • $500,000 – $999,999: 1,130 artists
  • $1,000,000 – $1,999,999: 590 artists
  • $2,000,000 – $4,999,999: 320 artists
  • $5m and above: 130 artists

Assuming US$50,000 marks the point where you can live off this money, that means only 16,500 artists, globally, made a living wage from Spotify royalties.

Spotify softens this by saying:

These figures only represent a part of the picture. Spotify is one of many music streaming services that generate revenue for the music industry, and streaming only makes up a portion of all industry revenues.

“There are also physical sales, touring, merch, sync, or other sources.

“In 2021, Spotify accounted for more than 20 per cent of recorded music revenue (up from less than 15% in 2017). For a rough estimate, you can multiply the Spotify revenue by four to approximate how much artists generated from all recorded revenue sources in 2021.”

Of course, Spotify doesn’t explain that this money is not what’s paid to artists, it’s what is generated by the work of artists, which is then divided by rights holders, record labels, management, and between whatever songwriters were involved.

That 20 per cent of recorded music revenue includes the massive catalogue sales which occurred last year: Neil Young, Brice Springsteen, Stevie Nicks, and Bob Dylan all made hundreds of millions from these one-off sales, which skew the figures heavily.

It’s far less than the figures shown above.

Spotify’s 20 per cent is likely to be a modest estimate.

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