Spotify Paid Royalties Of $9 Billion In 2023. What’s Driving Growth?

(CTN News) – Last year, Spotify paid out $9 billion in streaming royalties, according to its latest “Loud and Clear” report.

As a result of criticism over its lack of transparency, Spotify’s fourth annual report noted record accomplishments, such as paying the industry the highest annual payment of any retailer.

Founder and vice president of Spotify’s music product, Charlie Hellman, says: “This is everything we know about how much is being paid out, how many artists are achieving different levels of success.” In this way, everyone can stay up to date with the industry’s state.

The data shows that 1,250 artists generated over $1 million in recording and publishing royalties in 2023; 11,600 generated over $100,000 and 66,000 generated over $10,000. These numbers have almost tripled since 2017.

There are more than 66,000 artists from countries other than the United States and Canada participating in the competition, which reflects a more globalized music industry, the report says.

“Indie” artists, those who self-distribute and are signed to independent record labels, accounted for $4.5 billion, half of Spotify’s royalty payments.

Many people upload at least one song to YouTube, but that does not mean they are artists or if this is a hobby.

“There are about 225,000 professionally aspiring artists” on Spotify, he estimates. Spotify finds artists who have “at least put out an album’s worth of music once they show some indication of establishing a fanbase.”

The band has a small following. Concerts might be listed on Spotify.

To cut costs while becoming profitable, Spotify announced in December that it would lay off 17% of its employees.

The Spotify subscription service will cease to charge for songs that receive fewer than 1,000 streams annually starting in 2024.

In Hellman’s opinion, songs with fewer than a thousand streams in a year generate pennies in royalties. Based on our data, we saw an increase in uploaders with $0.03, $0.08, and $0.36 available.

In both cases, Hellman claims that withdrawal fees would exceed royalties, since DistroKid and TuneCore have minimum withdrawal thresholds.

The rights holders of music on Spotify’s platform are paid royalties based on the “streamshare” – a metric used by streaming services. Revenue from music rights holders is calculated by adding up the number of streams a musician’s music has received and dividing it by the number of streams he or she has received.

Market share quickly shifts to larger rights holders. Listeners do not receive 25% of the subscription fee if they stream 25% of the time, but the artist gets 25% of the subscription fee.

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