Musicians aren’t thrilled with Spotify — they say the streaming platform undervalues their work and they deserve to be paid more per stream. So today, Spotify’s trying to address those concerns with a new website called Loud & Clear, which offers more insight into how much the platform pays artists and how that money is distributed. The site also includes a calculator so artists can see where their work ranks on Spotify, like how a song with 100,000 all-time streams would only be in the top 2,710,000 tracks on the platform.
Notably, the company says it’s paid over $23 billion in royalties to rights holders, including over $5 billion in 2020, which is up from $3.3 billion in 2017. It also notes that there are 1.2 million artists with over 1,000 listeners on the platform — it doesn’t say how many artists there are total — and that 15 percent, or 184,500, of their catalogs generated recording and publishing royalties of at least $1,000. (Those payments don’t go directly to artists and are instead paid to their rights holders, like distributors or record labels, which then refer to the contracts they hold with artists to pay them. This means the artists likely didn’t receive the full $1,000 from their Spotify streams.) On the higher end, only 870 artists’ catalogs generated $1 million or more in royalties.
You can play around with the website to see all the data and, if you have questions about how streaming royalties work and how the company figures out how much to pay rights holders, there’s a video on that. I’m embedding it below.
Spotify’s increased interest in transparency comes about during a time when a couple of its competitors are experimenting with new ways to pay artists. Earlier this month, SoundCloud announced that it’d pay indie artists based on their actual listeners, rather than share of overall streams. So a SoundCloud subscriber’s subscription fee or advertising revenue is divvied up among the artists they actually listen to, rather than going to a big pot and being split up and shared with the platform’s most popular artists, like Spotify.
In a chat with ThinkAuthority, Charlie Hellman, Spotify’s VP and head of marketplace, noted that the company’s internal research doesn’t suggest that this model would meaningfully shift the types of artists that succeed, but that if the industry decided to move toward the change, Spotify would be “open” to it.
Maybe transparency will help artists feel like Spotify isn’t just profiting from their work, but it’s hard to imagine that being the case. Spotify, to its credit, has attempted to make it easier for artists to directly profit, with features like a tip jar and the ability to sell merch and concert tickets through the platform. But how much artists have earned through those features isn’t detailed on this new website, and the website makes clear that hundreds of thousands of artists earn far less than a living wage through the platform’s streams.