Spotify is working to dispel the notion that it takes advantage of the artists and labels who use it.
Spotify has a complicated relationship with musicians. They can scarcely survive without using it in the industry of today, but it has come under fire for how its low royalty payouts have come to devalue recorded music. Not so, says Spotify CEO Daniel Ek. In a statement, he claimed that the streaming platform paid out $9 billion to music rightsholders over the course of 2023.
This figure is 63% of Spotify’s total 2023 revenue of $14.336 billion, which it shared in its Q4 financials report earlier in the week. The statement also boasted that this amount has tripled over the past six years — although, to be fair, Spotify’s revenue itself has tripled in only five. All told, it puts the company’s lifetime rightsholder payouts at $48 billion since it launched in 2008.
In March 2022, Spotify had said that it paid out almost 70% of each dollar generated on its platform to rightsholders. In the same announcement, it said that the number of artists earning more than $1 million annually and the number earning more than $10,000 had both doubled in five years.
It hasn’t all been sunshine and roses for Spotify. In December, the company announced that it would be forced to lay off 17% of its staff, or roughly 1,570 individuals. That followed rounds of layoffs in which the company terminated 500 employees in January 2023 and 200 more the following June.
Spotify kicked off 2024 with new measures put in place to increase payouts to working artists. Among them are new fines imposed upon fraudulent uploaders and a 1,000 stream threshold that each track must meet in order to be monetized. Tracks belonging to “functional genres” like white noise must also be longer than 30 seconds in order to be eligible.
Spotify plans to share additional details in its annual Loud & Clear report.
