On Tuesday, Spotify released its annual Loud & Clear report, providing insights into its royalty payments to the music industry. Earlier this year, the platform announced it had paid out $10 billion to the industry in 2024, but the new report aims to clarify concerns about fair compensation for artists.
Notably, for the first time, an artist achieving one million streams on Spotify earned an average of over $10,000 in 2024—ten times more than what that same stream share would have generated a decade ago.
Despite Spotify’s claims of increased payouts, many artists are calling for fairer compensation. Recently, several Grammy-nominated songwriters boycotted Spotify’s Grammy party due to declining royalties. A change made by Spotify last year is projected to cost songwriters about $150 million over a year, according to Billboard.
Additionally, a report from Duetti, which Spotify has previously dismissed, shows that Apple Music pays artists significantly more than Spotify. In 2024, Spotify paid 3.00per1,000streams,whilecompetitorslikeAppleMusicandAmazonMusicpaid3.00 per 1,000 streams, while competitors like Apple Music and Amazon Music paid 3.00per1,000streams,whilecompetitorslikeAppleMusicandAmazonMusicpaid6.20 and $8.80, respectively.
In response to these criticisms, Spotify stated that claims about per-stream payouts are unfounded, emphasizing that payouts are based on an artist’s share of total streams rather than a fixed rate. The Union of Musicians and Allied Workers (UMAW) has called for fair compensation for artists, especially independent musicians. Last year, Congress members introduced the Living Wage for Musicians Act, aiming to increase streaming royalties to one cent per stream.
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UMAW criticized Spotify for not paying recording artists directly, highlighting a regulatory gap that allows the company to avoid such payments. Despite these concerns, Spotify’s report indicates that the number of artists earning royalties has tripled since 2017, with over 200 artists now earning more than $5 million—a significant increase from the previous decade.
The report also reveals that the earnings of lower-ranked artists have surged, with the 10,000th-ranked artist’s royalties increasing nearly fourfold since 2014. Furthermore, almost 1,500 artists earned over $1 million from Spotify last year, despite many not having hits on the Global Daily Top 50 chart. The report highlights the diversity of artists, with those earning significant royalties recording in multiple languages.
SOURCE: TECH CRUNCH
