August 17, 2022
Spotify, Amazon, Google, Pandora Score A Victory Against The CRB’s Proposed 44% Songwriter Royalty Increase

Approximately 7,500 artists – 0.09 percent of about eight million on-platform creators – earn $100,000 per year or more on Spotify, company higher-ups have revealed.  Think about that while musicians starve and Spotify is opening plush offices around the world on artists’ backs.

The noteworthy statistic came to light earlier this week, during the Stockholm-based service’s Stream On’ investor conference. Spotify spent a good portion of the 100-minute-long Livestream highlighting payout figures in an effort to demonstrate the progress it’s made “in helping more creators succeed,” per one of several releases published after the announcement-heavy happening.

“Three years ago, Spotify had three million creators on our platform. Every year since, that number has increased, from four million to five million to eight million at the end of 2020,” Spotify co-founder and CEO Daniel Ek said during Stream On. “I believe that by 2025, we could have as many as 50 million creators on our platform.

Later, Spotify’s chief content and advertising business officer, Dawn Ostroff, elaborated upon the number of artists who earn over $1 million or $100,000 annually from Spotify streaming royalties.

“Over the last four years, the number of recording artists whose catalogs generated more than $1 million a year across recording and publishing is up over 82 percent, to more than 800 artists. And the number generating more than $100,000 a year, that’s up 79 percent, to more than 7,500 artists,” said the former CW and Condé Nast Entertainment president.

Calculating based upon the latter figure (the 7,500 creators who took home over $100,000 from Spotify streaming royalties) and the eight million or so total creators that Ek mentioned, just .094 percent of on-platform creators make more than $100,000 annually in royalties from Spotify, which had 345 million MAUs as of Q4 2020.

The relatively small collection of professionals who generate $100,000+ per year from Spotify is noteworthy given that Ek has long expressed a desire to see a larger share of artists live off their streaming income. Building upon the point, Spotify’s per-share royalty rate has reportedly decreased in recent years, as its music library has continued to grow while pricing has stayed the same in most major markets.

For reference, Spotify’s eight million current creators have made 70 million tracks and north of 2.2 million podcasts available to fans, according to another formal release and the Q4 2020 earnings report, respectively. Spotify paid $5 billion to rightsholders in 2020, the former source relayed, whereas 57 percent of artists generated some 90 percent of monthly streams. The 57 percent figure represents a 400 percent hike across the last six years.

That the creator-growth trend appears poised to proceed during the next half-decade, possibly en route to the massive 2025 creator benchmark that Ek highlighted, is therefore worth bearing in mind with regard to Spotify’s per-stream payment rate.

More pressingly, Spotify doesn’t have plans to raise prices in the U.S. anytime soon, and despite arriving in South Korea without an ad-supported tier, the company expects paid subscribers to number 155 million to 158 million at Q1 2021’s end. 155 million individuals had premium Spotify plans as of Q4 2020, but costs vary dramatically based upon one’s location.

Therefore, in an effort to diversify and broaden its earnings, Spotify has embraced lossless audio (at a higher monthly cost) and will begin testing paid podcast subscriptions later this year.

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