Spotify, the world’s largest music streaming service, accounting for 20% of total music industry revenue and 40% of streaming revenue, has been repeatedly under fire for its notoriously low payouts to artists. While they have been credited with reviving music revenue after many years affected by piracy and illegal downloads, artists are calling out that they make fractions of a penny per stream.
Spotify recently released some key data, revealing they paid out $5bn in 2020 to artists (up from $3.3bn in 2017). The number of artists generating substantial sums is increasing, with 870 generating in excess of $1m last year, up from 450 since 2017. This increase has meant that the platform’s top 500 artists last year generated around $1.85bn in royalties – equating to 37% of its overall payouts and an average of $3.7m each.
Comparatively, only 184,500 artists made over $1k+ (£750) in royalties for 2020 from their entire music library, and only 13,400 generated over $50,000, despite Spotify having 70+ million songs in its library as of November 2020.
Spotify doesn’t always pay directly to the artists though. Typically a third party such as a record label or Tunecore will receive the payout, meaning that the artist earns even less. Protests to democratise the music industry have also been raised, with the world’s three biggest music labels (Sony, Warner and Universal) responsible for 87% of Spotify’s content.
Conversely, Spotify, which charges listeners £9.99 a month, said it had made the music industry more diverse and lowered entry barriers compared to the days when artists required heavy promotional budgets.
Last August in an interview with Music Ally, Spotify’s Director Daniel Ek, received backlash for announcing it “wasn’t enough” for artists to “record music once every three to four years”, saying “I feel, really, that the ones that aren’t doing well in streaming are predominantly people who want to release music the way it used to be released.”
In response to the streaming payouts, there have been several protest movements, with The United Musicians and Allied Workers Union creating the campaign ‘Justice at Spotify’, which set outs to increase the average streaming royalty to one penny per stream for all artists. The campaign has already gained 27,564 signatures and counting.
“We will be holding demonstrations at Spotify offices across the world to deliver our demands. We are demanding a penny per stream, increased transparency, an end to lawsuits against artists, and more.”Justice at Spotify
Words: Elle Farrell-Kingsley
Cover image: Patrick Perkins