Spotify has made their Loud and Clear report public and it shows just how much the company paid in royalties last year. The platform is by far the largest in the streaming industry. They have the most subscribers, are the most recognizable brand, and they make a ton of money. For the rights to have all the music in their catalog, they also pay a lot of money in royalties.
Billions for Labels
- Spotify announced that they paid out $7 billion in royalties in 2021 alone
- Those royalties are largely going to labels and publishers and other entities that own the rights to music
- The money does not go directly to artists and songwriters
- Spotify claims that revenue from streaming has surpassed CD revenue for each year between 2009-2016
- The streaming platform came under fire earlier this year leading to multiple artists pulling music from their service
Spotify, founded in 2006, has become a giant in the music and tech industry. Of course, they are pushing more podcasts as time goes on. When you see the money they are paying out in music royalties, it isn’t hard to see why. $7 billion in royalties were paid out to labels, publishers, distributors, and others that own the rights to the music on the streaming platform.
While that is a ton of money, artists don’t always have rights to their royalties, or they have marginal deals. However, the company is pushing these numbers like they are putting more money in artists’ pockets. There have been a number of issues with the platform over the years. Taylor Swift famously pulled her music over a similar issue.
However, when you compare the streaming industry to the CD industry from 2009-2016, it is impressive. $16.9 billion in revenue were generated in 2021 from all streaming. Spotify made up a large majority of that revenue as well.
Another stat that the platform boasted was the fact that 50,000 artists generated at least $10,000 from Spotify. That’s a large number of artists. However, once again, that is money generated, and not money earned. If they have 100% of the rights and revenue then that’s a lot of money in their pocket. That’s never how it goes, though.
Spotify Boasts Royalties Versus CD Era
One thing that the Loud and Clear report wanted to make clear, streaming has surpassed CD. Well, of course, it did years ago as the preferred method of listening to music. However, Spotify is arguing that they have expanded the music industry to many others, not just big names that can push physical copies.
The report noted that in the CD era, at the peak, 25% of U.S. album sales were made up by the top 50 artists. A small club of a privileged few. Now, on Spotify in 2021, only 12% of streams in the U.S. were from the top 50 artists on the platform. The argument is there are more opportunities for artists than in the past.