In 2023, Spotify Generated $4.5 Billion For Independent Artists And Labels

(CTN News) – Spotify has revealed that half of the $9 billion generated by the music industry on Spotify in 2023 was allocated to independent labels and artists – $4.5 billion out of that $9 billion.

Since streaming became the dominant platform for music around a decade ago, it has leveled the playing field in a number of ways. Independent artists, as defined by Spotify, are now more than half of that total for the first time, whether they are signed to a major label or self-released.

Spotify is the world’s largest paid music streaming service, with more than 236 million paying subscribers, and the United States is its largest market.

In order to understand how much money actually reaches artists, it is important to note that the amount of money that is paid to artists is determined by the rights holders – typically labels and music publishers – and not by Spotify. As a first step, payments are sent to the rights holder(s), who then take their fee or percentage and pay the creators their share of the payments.

The company notes that the revenue generated by indies from Spotify in 2023 was the highest ever for an independent retailer.

It is estimated that $4.5 billion generated by indies on Spotify in 2017 was four times greater than what indies generated on Spotify in 2017 as well as greater than the total recorded music industry in all countries except the United States.

The company announced earlier this year that it had not only paid out $9 billion to the music industry in 2023, but that it had also paid out $48 billion since its founding in 2008 in order to repay the music industry.

The company said in its annual report last year that it pays nearly 70% of every dollar it makes from music back to the music industry, and that it generates its revenues from music from two sources: subscription fees from paying subscribers on its Premium platform, and advertising fees from advertisements on its Free platform.

The rights holders include record labels, publishers, independent distributors, performance rights organizations, and collecting societies, among others.

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