Spotify says that streaming has made the world ‘value music’
Spotify wants to see 1 billion people paying for streaming music, double the more than 500 million customers who currently subscribe to Spotify and its competitors. In Spotify’s view, artists are lucky to have streaming services, “each doing its part to normalize the behavior of paying for music.”
On Tuesday, the streaming giant announced that it paid out $10 billion to the music industry in 2024, with total contributions reaching almost $60 billion since its founding in 2006 — five years after Napster ceased operation. Spotify estimates that around 10,000 artists generated at least $10,000 per year on the platform in 2014. “Today, well over 10,000 artists generate over $100,000 per year from Spotify alone,” Spotify VP David Kaefer said in the blog post. “That’s a beautiful thing.”
In the blog, humbly titled “Getting the world to value music,” Kaefer describes the pre-streaming era of music as an exclusive club that made it difficult for new artists to enter the industry. “Now, you can record something today and have it on Spotify tomorrow,” said Kaefer. “Everyone’s invited.”
In November, Spotify reported it was on track to achieve its “first full year of profitability” and had €4 billion (about $4.1 billion) in total revenue for the preceding three months — a 19 percent increase from the same quarter a year earlier. Next week, it will report earnings for the entirety of 2024.
Spotify reportedly has lower per-stream artist payout rates than rival services like Apple Music, YouTube Music, and Amazon Music, and the platform’s streaming royalties and recommendation algorithms have been widely criticized by artists and policymakers over the years. Many artists claim that payouts are too small and that the focus on promoting big artists makes it hard for new musicians to be discovered on the platform.
Chris Macowski, Spotify’s global head of music communications, attributes competitors’ higher per-stream rates to “low engagement” on services where subscribers “listen to less music.” Spotify optimizes for “higher overall payout,” he says.
Spotify has released industry payout figures frequently over the last few years to push back against these criticisms. In December, a parody “Spotify Unwrapped” website that compared Spotify subscription fees to artist payouts was taken down by Spotify’s legal team.
Update, January 28th: Added comment from Spotify on per-stream payout rates.