Spotify Discloses 2023 Per-Stream Royalty Rate, Artist Earnings Stats, and More in Loud & Clear Report

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spotify loud and clear
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Spotify Loud and Clear 2023 is providing a look at, among other things, the service’s per-stream royalty rate. Photo Credit: David Pupăză

Spotify has officially published the full Loud and Clear report for 2023, shedding light on the specifics of its payouts last year and providing an up-to-date look at its per-stream royalty rate.

Stockholm-based Spotify unveiled its latest Loud and Clear analysis today, after revealing a portion of the breakdown in early February. In the preview, the music, podcast, and audiobook service emphasized that it had paid a total of north of $48 billion to the industry (including $9 billion during 2023).

Returning to the just-released full report, though, Spotify throughout the document pointed to its role as a supplemental revenue source – going as far as encouraging readers to multiply artists’ on-platform royalties by four to estimate “revenue from recorded music sources overall.” Additionally, the business drew attention to the potential income associated with live performances, merch sales, and more.

In brief, this focus on diverse revenue sources has arrived amid continued emerging-market user growth for Spotify. The service previously reported an average of 602 million monthly active users for Q4 2023 – with 54 percent of the individuals residing beyond North America and Europe.

Notwithstanding their long-term potential, many music spaces outside the latter two continents are currently difficult to monetize, with comparatively small monthly costs and advertising contributions. But as the streaming-partial nations are still producing all manner of plays – Luminate identified 1.04 trillion total on-demand streams in India during 2023, second only to the U.S. (1.45 trillion) and followed by Brazil (373.5 billion) – the much-discussed per-stream royalty rate is still dipping.

Running with the idea, Spotify spelled out in Loud and Clear 2023 that “artists can start approaching $1 million per year [in Spotify recording royalties] with around 4-5 million monthly listeners or 20-25 million monthly streams.”

Calculating based on the implied annual stream count of 240 million to 300 million (and acknowledging the “start approaching” phrasing’s ambiguity), that comes out to an average of $0.003 to $0.004 per stream. For reference, the high end of that range was in the not-so-distant past widely reported as $0.005 – a telling point given the sweeping (and controversial) payout changes Spotify has implemented.

Predictably, Spotify, which also made available a lengthy FAQ, a “Streaming Numbers in Context” calculator, and more, opted to draw attention to different stats behind its 2023 royalty payouts. All told, approximately 66,000 artists generated at least $10,000 in on-platform payments last year, with over half the acts based in “countries where English is not the first language,” per the Daniel Ek-led entity.

11,600 professionals topped $100,000 in Spotify royalties during 2023, and 1,250 made their way into the $1 million category, the document shows.

Number of Artists Per Spotify Royalties Bracket – Recording and Publishing, 2023

  1. $1,000 or more: 259,700 artists (up 20,700 year over year)
  2. $5,000: 103,400 (+10,400 YoY)
  3. $10,000: 66,000 (+8,100 YoY)
  4. $50,000: 20,500 (+2,500 YoY)
  5. $100,000: 11,600 (+1,500 YoY)
  6. $500,000: 2,620 (+370 YoY)
  7. $1,000,000: 1,250 (+180 YoY)
  8. $2,000,000: 570 (+100 YoY)
  9. $5,000,000: 170 (+40 YoY)
  10. $10,000,000: 60 (+20 YoY)

 

Lastly, bearing in mind the aforementioned Universal Music-spearheaded Spotify royalty changes – which, owing to the involved 1,000-stream minimum before each track begins accruing royalties, are effectively cutting off recording payments for the vast majority of songs on the service – indie and DIY artists received “nearly” $4.5 billion from the platform.

Consequently, 2023 represents “the first year ever” that non-major-label acts “accounted for about half of what the entire industry generated on Spotify.”