On Tuesday, Spotify published its annual Loud & Clear report, detailing the music streaming service’s royalty payments. While Spotify announced earlier this year that it would pay $10 billion to the music industry in 2024, the new report provides more details on the payments to refute reports that the company is not properly rewarding artists for their work.
For the first time in history, an artist who received one of the million streams on Spotify earned more than $10,000 on average in 2024, which is 10 times more than the same figure a decade ago, the report says.
While Spotify advertises the amount it has paid to artists and songwriters, many are demanding fair compensation from the streaming service. A few weeks ago, a number of Grammy-nominated songwriters boycotted the Grammy Awards party organized by Spotify because the music streaming service had reduced their royalties. Billboard estimates that due to the changes introduced by Spotify last year, authors may lose about $150 million in 12 months.
In addition, a new report by Duetti (which Spotify denied in a previous statement to TechCrunch) found that Apple Music still pays artists twice as much as Spotify. It says that in 2024, Spotify paid artists $3.0 per 1,000 streams, while other platforms such as Amazon Music, Apple Music, and YouTube paid $8.8, $6.2, and $4.8 per 1,000 streams, respectively.
Following the report’s publication, Spotify told TechCrunch that “these claims are ridiculous and unfounded” and that “no streaming service pays per stream.”
In a new report, Spotify attempts to dismiss these reports and concerns. The report details the company’s payout model to explain how artists and publishers generate revenue on its platform.
“The largest streaming services calculate payments in the same way: based on the share of the stream (if an artist’s catalog accounts for 1% of the total number of streams, they will receive 1% of the total royalties),” the company explains in its report. “Nevertheless, misconceptions about ‘pay per stream’ remain widespread. Streaming services do not pay a fixed rate per stream, just as listeners do not pay for each song they listen to.”
The Union of Musicians and Allied Workers (UMAW) is calling on Spotify to fairly compensate musicians, especially independent and small artists who are struggling to make a living. Last year, Congresswoman Rashida Tlaib and Congressman Jamal Bowman partnered with the UMAW to introduce the Musicians’ Living Wage Act, detailing a proposal that would increase royalties to musicians for streaming to one percent per stream.
“It’s easy to calculate how much Spotify pays directly to artists: $0,” a UMAW spokesperson told TechCrunch.
“Spotify does not pay artists directly because the company claims that its streaming method does not fall under any existing rules or requirements for direct payments to musicians – unlike other digital platforms such as satellite radio, internet broadcasting, or ‘non-interactive’ streaming broadcasting that do pay artists directly. Clearly, this has to change. UMAW supports the Musicians’ Living Wage Act to close this loophole and force streaming to pay musicians who create content for Spotify and other platforms,” the statement concluded.
The Spotify report says that payments are getting better, despite industry concerns.
The report shows that the number of artists receiving royalties has tripled since 2017. A decade ago, the most popular artist on Spotify earned just over $5 million, while today more than 200 artists have surpassed that figure.
Over the past decade, the royalties of the 10,000th artist in Spotify’s ranking have increased almost 4 times – from $34,000 to $131,000, and the 100,000th artist – more than 10 times – from less than $600 in 2014 to almost $6,000 in 2024.
In addition, the company found that nearly 1,500 artists received more than $1 million in royalties from Spotify alone last year. Spotify notes that 80% of these artists did not have songs that would have made the Spotify Global Daily Top 50 chart in 2024, which means that many of them are not household names.
Spotify also reported that artists who received at least $100,000 in royalties in 2024 recorded music in more than 50 languages, and artists who received at least $1 million in royalties on Spotify recorded music in 17 different languages.
