Spotify, Amazon, Google, Pandora Score A Victory Against The CRB’s Proposed 44% Songwriter Royalty Increase

Just 13,400 Spotify Artists (Out of 7 Million) Make More Than $50,000 A Year

About 13,400 artists generated $50,000 or more in Spotify royalties during 2020 – though there are an estimated total of approximately seven million acts with music on the platform.

Spotify shed light upon artists’ earnings, factoring for both recording and publishing royalties, in a breakdown entitled “Loud & Clear.” The resource “aims to increase transparency by sharing new data on the global streaming economy” – likely in response to criticism of and investigations into streaming royalties.

To be sure, musicians earlier this week rallied outside of Spotify’s offices to protest the service’s per-stream royalty rate as well as the alleged lack of transparency surrounding its deals with the Big Three record labels. Moreover, Paul McCartney, Led Zeppelin founder and guitarist Jimmy Page, and “Cars” singer, songwriter, and producer Gary Numan are among the prominent musicians who’ve publicly taken aim at streaming payments in recent months.

Additionally, Spotify CEO Daniel Ek revealed during his company’s “Stream On” investor conference that there were eight million “creators” on the platform at the end of last year. However, “creators” in this instance refers to both artists and podcasters, and Spotify users could choose from roughly 2.2 million podcasts at 2020’s conclusion, according to the business’s Q4 2020 earnings report.

Thus, some sources have estimated that there are presently seven million or so artists on Spotify – meaning that the aforementioned 184,500 artists who earned at least $1,000 in royalties in 2020 might represent just 2.64 percent of those whose music is available to fans via the service.

And as a separate aside, it takes about 200,000 streams to make $1,000 on Spotify, calculating for the high end of the service’s reported per-stream royalty rate, one-third of a penny to one-half of a penny.

67,200 artists (.96 percent) generated $5,000 or more in Spotify royalties during 2020, and the figure falls to 42,100/.6 percent at $10,000+ in royalties, 13,400/.19 percent at $50,000, 1,820/.026 percent at $500,000, and just 870/.012 percent at $1 million.

While the multibillion-dollar royalty-payments growth across 2017 and 2020 is positive, it’s possible that Spotify’s per-stream payments – and, in turn, the portion of artists in the above-mentioned earnings brackets – could decrease in the coming years as the creator community continues to expand. For instance, Daniel Ek also stated during the Stream On event that “by 2025, we could have as many as 50 million creators on our platform.”

In an effort to increase earnings from a potentially plateauing userbase, Spotify in recent weeks has rolled out a HiFi option, started playing ads to premium users during podcasts, and explored the possibility of raising subscription prices in the UK. That said, Ek reiterated in February that Spotify’s monthly cost won’t increase in the United States anytime soon.

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