Payments from Spotify to the music industry approaching $40 billion

The streaming giant announced on Wednesday that its payouts to date to music-right holders is nearing the $40 billion mark.

For every dollar it generates, Spotify has stated that nearly 70% of that goes back into the music industry. Its two sources of music revenue include subscription fees from its Premium service and advertising fees generated on their Free tier.

The announcement went on to detail that the rights holders include record labels, publishers, independent distributors, performance rights organisations and collecting societies. However the payments that go towards the rights holders first rarely include the artist or songwriter, which are credited with their share once the rights holder fee or percentage is claimed.

The announcement also detailed that more than $3billion was paid out to publishing rights holders, PROs and collection societies representing songwriters for the past two years.

Spotify remains the world’s top paid music-streaming service with 205 million paying subscribers, and the US remains the company’s biggest territory.

Made at Spotify’s ‘Stream On’ conference, these announcements come as major music companies call on Spotify to increase its subscription rate, mirroring Apple and Amazon Music’s recent move. The streaming company has not raised its rates since its launch, almost 12 years ago.

At ‘Stream On’, it was also revealed that the amount of artists generating more than one million annually, as well as those generating more than $10,000, had doubled over the past five years, with around 1,060 artists (an increase from 460 in 2017) in the million category and approximately 57,000 (an increase from 23,400 in 2017) in the $10k.

Compared to 2017, more than 10,100 artists generated at least $100,000 on Spotify alone, up from 4,300.

“These figures represent revenue generation from Spotify alone,” the announcement details. “When taking into account earnings from other services and recorded revenue streams, these artists likely generated 4x this revenue from recorded music sources overall.”

It was also noted that a quarter of those artists who generated over $10,000 self-released their music via distributors DistroKid, Tunecore and CD Baby.

As of December 31st 2022, 360 songs on Spotify account for more than 1 billion streams, with 13,000 having more than 100 million streams, and 914,000 with more than 1 million streams.