Spotify accounts for 20% of all recorded music revenue

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Spotify has released its annual Loud and Clear report, which it launched last year in a bid to “increase transparency” around its payment plans.

The report generally buries the real news in light of self-congratulatory statistics, such as presenting the $7 billion in royalties it paid out in 2021 as “the largest sum paid by a retailer to the industry. of music in one year in history – including any single retailer at the height of the CD or digital download era.

Spotify also pointed out that over 52,600 artists earned over $10,000 from Spotify in 2021, with 130 of them paying over $5 million.

These are not good statistics. Especially when you analyze 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
  • $5 million or more: 130 artists

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

Spotify sweetens this by saying:

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

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

“In 2021, Spotify accounted for more than 20% of recorded music revenue (compared to less than 15% in 2017). For a rough estimate, you can multiply Spotify revenue by four for approximately how many artists generated from all recorded revenue streams in 2021.”

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

This 20% of recorded music revenue includes the massive catalog sales that took place last year: Neil Young, Brice Springsteen, Stevie Nicks and Bob Dylan all made hundreds of millions from these one-time sales, which greatly distorts the figures.

This is much less than the figures given above.

Spotify’s 20% is probably a modest estimate.

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