Spotify Claims 1,040 Artists Earned $1 Million+ From On-Platform Streams in 2021, Expresses Willingness to Adopt Fan-Powered Royalty Model

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Spotify subscriber slowdownSpotify subscriber slowdown Photo Credit: Haithem Ferdi

Spotify has officially claimed that more than 1,000 artists earned over $1 million each from on-platform streams during 2021.

The Stockholm-based service disclosed this stat and other noteworthy figures in its newly updated (for 2021) Loud & Clear resource. According to the expansive document – which claims at the outset that “Spotify has paid over $30 billion in royalties to the music industry,” including north of $7 billion in 2021 – last year saw the catalogs of 1,040 artists make $1 million+ apiece from “recording and publishing royalties” on Spotify.

This total represents an increase of 180 from 2020 (which delivered $1MM+ to 860 artists) and 320 from 2019 (720 artists), per the analysis. Spotify likewise relayed that 130 artists’ work had generated more than $5 million during 2021 (up from 100 in 2020).

Meanwhile, 450 artists earned at least $2 million in on-platform royalties (up from 360) during 2021, Spotify stated, against 2,170 artists for $500,000 (up from 1,800), 9,500 for $100,000 (up from 7,800), 16,500 for $50,000 (up from 13,400), 52,600 for $10,000 (up from 42,500), 81,500 for $5,000 (up from 67,700), and 203,300 for $1,000 (up from 186,600).

Next, the multifaceted breakdown dives into a description of Spotify’s royalty system – which is “based on an artist’s share of overall streams across the platform” as opposed to actual fan engagement. (Of course, the latter benefits acts with highly dedicated fanbases but not billions of streams.)  

Included with said description is a tool that calculates artist and song rankings for an inputted monthly listener or stream total, respectively. For instance, entering 1,000,000 all-time streams into said tool reveals that a song with the play count “would be in the top 719,000 tracks on Spotify globally.” Similarly, “1,000,000 monthly listeners would be in the top 9,000 artists on Spotify globally.”

Bearing in mind Spotify’s emphasis upon current payment totals and ultra-high song-play volumes, a three-minute video then hypes streaming (and Spotify’s role therein) while reiterating the nuances of the platform’s payouts. An artist-definition section (“chart toppers,” “DIY,” etc.), a publishing-focused “industry context” page, a bunch of articles involving “Tips for Beginning Songwriters and Producers,” and “additional resources” yet follow.

Just in case this tidal wave of information wasn’t enough, Spotify – which has faced criticism over its per-stream royalty rate as well as its non-music expenditures – closed out the piece with some 4,400 words’ worth of answers to questions like “Is streaming only helping music’s biggest stars?” and “Would the user-centric model be more fair?”

This component of Loud & Clear 2021 (and a concise summary at the beginning) touches upon interesting subjects such as:

The Major Labels

Spotify noted that the Big Three labels – Universal Music, Sony Music, and Warner Music – “earned over $4 billion in profit in 2021, driven by streaming.”

Self-Distributed Artists

“Many artists use distributors like DistroKid, TuneCore, CD Baby, or others to self-release their music on Spotify — and for more than ever before, it paid off.

“28% of artists who reached $10,000 in earnings on Spotify released music through an artist distributor in 2021,” the platform said. “These 15,140 artists represent a 171% increase since 2017.”

The Revenue of New Artists – and the Continued Reach of Catalog Releases

“Over 10% of artists (5,300) who generated more than $10,000 on Spotify in 2021 released their first song ever in the last two years. In 2021, 350 of them generated $100,000 from Spotify alone.”

The Earning Potential of Artists Outside Leading Music Markets

“Of the 52,600 artists who generated more than $10,000 on Spotify in 2021, 34% live in countries outside the IFPI’s top ten music markets,” the company communicated.

The Specifics of New Spotify Music Uploads and Artists

“For example, of the eight million people who have distributed any songs to Spotify, 5.4 million of them have released fewer than ten tracks all-time.”

(This stat is especially interesting because Spotify head Daniel Ek previously said: “I believe that by 2025, we could have as many as 50 million creators on our platform.”)

Possible Spotify Price Increases

“The cost of a subscription is not an insignificant amount for many. Raising prices is a fine balance — we don’t want to drive people back to piracy or unmonetized solutions.”

A Potential Pivot to a Fan-Powered Royalty Model – Like Tidal and SoundCloud

“The research we’ve seen to date suggests that a shift to user-centric payments would not benefit artists as much as many may have originally hoped.

“We are willing to make the switch to a user-centric model if that’s what artists, songwriters, and rights holders want to do. However, Spotify cannot make this decision on its own; it requires broad industry alignment to implement this change.”

The Spotify Revenue of Legacy Artists and Catalog Music

“On this site we spotlight Heritage artists — which we define as averaging more than 500,000 monthly listeners with 80% of their streams from tracks more than five years old. This group, on average, generated $473,000 from Spotify alone in 2021 (and likely well over $1 million across all streaming services).”

Spotify’s “Millions” in Podcast Investments

“Our investments in original and Exclusive podcasts have brought millions of new listeners onto Spotify — listeners that stick around to stream music on Spotify, too, increasing the music royalty pool.”

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