Spotify says its payouts are getting better, but artists still disagree

#TheDriveWithSkrypt Megabytes: Is the piper finally getting paid?

Spotify released its annual Loud & Clear report, detailing information about the music streaming service’s royalty payments. While Spotify revealed earlier this year that it paid out $10 billion to the music industry in 2024, the new report offers more in-depth numbers about its payments in an effort to dispel reports that the company doesn’t reward artists properly for their work.

For the first time ever, an artist who received one in every million streams on Spotify generated over $10,000 on average in 2024, which is 10x what the same streamshare would have generated a decade ago, the report says.

While Spotify is touting the amount it has paid out to artists and songwriters, many are demanding fair compensation from the streaming service. A few weeks ago, a number of Grammy-nominated songwriters boycotted Spotify’s songwriter of the year Grammy party because of the music streaming service’s decreasing royalties. Due to a change introduced by Spotify last year,  Billboard has estimated that writers stand to lose about $150 million over 12 months.

A look further down the funnel shows how tough it is for most musicians to make a living on the platform. 

Spotify says that the 10,000th-best-paid artist on its platform received royalties of $131,000 last year, up from $34,000 a decade ago. That still means just a little over 4% of musicians whose work is featured on the platform can expect to live comfortably. That’s of course not factoring in money that has to be split up among multiple band members, or with lawyers and agents.

According to Spotify’s report, about 110,000 acts — or roughly half of all on the platform — got $5,000 or more for the year, meaning that for most, touring remains key to any real financial success.

Another issue is that Spotify pays its royalties directly to record labels, with whom artists don’t always have the most advantageous financial relationships. While this is not Spotify’s fault, it reinforces the often weak financial position in which musicians have long found themselves.

Spotify’s report touts that its payments are getting better, despite concerns from the industry. 

The report reveals that the number of artists generating royalties has tripled since 2017. A decade ago, the top artist on Spotify earned just over $5 million, while today, more than 200 artists have surpassed that milestone.

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