Audio streaming company Spotify said Tuesday that it paid $10 billion to the music industry last year. The company added that it has given nearly $60 billion in industry payouts since its inception.
This is another effort from Spotify to dispel reports that the company doesn’t reward artists properly for their work. The key point to note is that the payouts also include money given to other partners, such as publishers.
According to a report from the International Federation of the Phonographic Industry (IFPI), a music body representing artists, there are over 500 million paying music streaming customers worldwide. Spotify has over 252 million subscribers as per its Q3 2024 filing. Spotify said that more than 60% of its current users were on its ad-supported free tier.
“For a lot of people, those numbers might go in one ear and out the other. And they’d perhaps ask why Spotify keeps shouting about it,” David Kaefer, Spotify’s VP of Music Business, said in a post.
“It’s because the system we’ve built together is working, and where we are now is only the beginning. Today, there are more than 500 million paying listeners across all music streaming services. A world with 1 billion paying listeners is a realistic goal we should collectively set.”
The company quoted various reports noting that Spotify contributes a significant portion of global streaming revenue. It also said that more than 10,000 artists earn over $100,000 per year from streaming revenues. In 2014, more than 10,000 artists were earning more than $10,000 per year, it said.
Earlier this month, a report from music financing platform Duetti noted that per-stream rates for independent artists are stabilizing after a few years of decline. However, Spotify was the lowest in these payouts, with $3.0 per 1,000 streams. Other platforms like Amazon Music, Apple Music, and YouTube paid $8.8, $6.2, and $4.8 per 1,000 streams in 2024.
The report also pointed out that while Spotify has raised prices for its plans over the years, the average payout has declined.
Spotify dismissed Duetti’s claims and disputed the report’s number and “unattributed guesses” across the board.
“These claims are ridiculous and unfounded. No streaming service pays per stream because that approach would incentivize streaming services to minimize streams. It would mean low engagement, fewer artist connections, and lower overall payouts. Instead, we take the opposite approach. We want users to engage more so that they pay more – both by sticking around and choosing premium,” a company spokesperson said.
What’s more, the report emphasized that Spotify’s Discover Mode, which allows artists to get their songs highlighted better through algorithms while taking a pay cut, is contributing to an increasing number of streams. This means artists have to get streamed much more to earn the same amount of money.
There is also an increase in competition to get streaming dollars. According to Luminate’s yearly music report, an average of 99,000 tracks were uploaded to streaming platforms per day. The report also noted that global streams hit 4.8 trillion — a 14% jump year-on-year.
The story has been updated with Spotify’s response to Duetti’s report.
