Photo Credit: Sara Kurfeß
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.
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 cofounder 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.
60% to 70% of Professional musicians have had to quit the music business to be replaced by Hobbyist/Amateur musicians. The era of QUALITY MUSIC is coming to an end and the fans just don’t seem to care. They just don’t want to pay the musicians for their labors. And STOLEN MUSIC is so common now with people sharing and swapping their music libraries. Michael McDonald SEVENTEEN YEARS between albums, Alan Parsons FIFTEEN YEARS between albums is the result of this new business model. Budgets now so low that 0.00002% are making money, the rest all wasting their time thinking they can make money then don’t! QUALITY MUSIC costs a lot of money and the fans no longer have to pay for it!
Plus, who came up with these numbers? When they say that 7500 make $100,000 or more, they probably mean 7500 RECORD COMPANIES received this money, then the artists get 8% or NOTHING after deductions from their record companies! Does Spotify have access to all the unique deals artists have with their record companies? I have had many HIT RECORDS with recording contracts during my career and pretty much seen NOTHING in revenues. This is extremely common for artists. Maybe this statement above needs to be revised after talking to the artists themselves and finding out what they really got paid. We desperately need a NEW BUSINESS MODEL for the music business which needs to come from the musicians themselves (and not from middle men!)
Sounds like you realize the issue is with recording companies and not Spotify. Spotify isn’t able to get around the recording companies, who own the rights to the music. You’re right, they’re a fat middle man and they’re the ones benefiting from the streaming model.
So basically nothing has changed and Spotify is helping people understand exactly what’s been the case for 50 years? A small handful of artists make money, a HUGE amount of artists quit, and a very large group hang in there making close to nothing. Who is surprised by this?
plus they keep finding ways to not pay independent artist, i just had a company that was doing things by spotify policies and they all of a sudden change it to negate everything they were doing, they keep making up BS rules, that remove valid marketing and results, all so they won’t have to pay independent artist, which is basically funneling all the people to label artist and that is why only the labels are getting paid and the rest aren’t, the government should never allow a middle man company to stop artist from profiting the most. that’s what’s all these streaming companies have done, they are the middle man, people use to buy music for $15 and up and even dj’s used to buy the records they want to spin, now their is not revenue option for the artist but streaming, and the streaming is only benefiting the labels. people will listen to what ever is good, they don’t care if it’s from a label. the government needs to do what’s right and regulate this industry, instead of being pay to look the other way.
Build your own Fanbase and Marketing and sell to people directly off your website. Fuck the Majors and Spotify and all the others that don’t want to pay. I keep saying that these companies should be forced into paying the actual MUSIC CREATORS a share of customers monthly subscription fee, 1/2 would be fair along with the streaming fee.
Roberto, you’re hilarious, and an obvious liar. I was wondering where Michael McDonald and Alan Parsons were. I thought I saw them near the homeless shelter last week, panhandling to get some balloons. Oh wait, that was probably you.
I know it’s unfashionable to say this here, but my royalties are arriving just fine every month. It seems like only the fucking losers can’t make any money in the music biz. As it should be.