Questions and concerns about artist income from streaming have been around for over a decade. Since we launched it in 2021, our aim with this site is to provide a valuable foundation for a constructive conversation. In sharing more information, we aim to answer questions and share useful resources about today’s streaming industry. We’re currently the only streaming service that makes this level of royalty data available, and we hope others will join in the conversation as well.
Your Questions, Answered
We know you have a ton of questions around music streaming economics and we want to make sure to get you the answers. We’ve included the questions we get most frequently from artists and will continue to add to this list as more questions come in.
What’s new on Loud & Clear this year?
On March 8, 2023, we updated this site with new information:
- We added 2022 royalty data across the entire site;
- We published a new set of Top 10 Takeaways at the top of the site to summarize all the data;
- We added more detail to the Revenue Generation Over the Years section — specifically, the number of artists crossing the $10 million level in revenue generation; and
- We added a new “How the Money Flows” video, focusing on the publishing royalties side of the industry, and a new “How They Made It” video spotlighting artist stories.
Wasn’t the music industry better off before streaming?
Spotify plays a leading role in a healthier music industry, as a sort of radio station and record store all rolled into one — but without their limitations.
With radio, artists can reach lots of listeners. However, there’s limited space in a radio station’s rotation of songs — they typically stick to the top 40, making it harder for artists to break through. And in some markets, not all talent is compensated for their music being played.
Artists benefit from a high purchase price in record stores, but physical and digital sales don’t generate money from all of an artist’s fans — only those willing to spend money to download tracks or purchase a full album.
Spotify solves these challenges with streaming. Streaming is where fans come to put their favorite artists on repeat, but it’s also where casual fans discover new music or rediscover old favorites. And revenue is generated from both types of listening — from fans who pay for Spotify Premium to advertisers that fund Spotify’s Free tier. (We have over 200M Premium subscribers, and 60% of first-time subscribers start out on the Free tier and then later upgrade.)
Based on our analysis of RIAA data, the music industry in the CD era favored superstars twice as much as it does today. At the peak of the CD era, 25% of US sales were accounted for by the top 50 artists. In 2022, only 12% of US streams on Spotify were of the top 50 artists — meaning that revenue opportunities now reach far beyond the biggest stars.
When Spotify launched in 2008, the global recording industry was being ravaged by piracy — spiraling downward from 1999’s peak of over $24 billion in revenue to the industry’s low point in 2014, when the combined market of physical and digital sales was $14 billion.
Since then, streaming has powered the resurgence of the music industry. Spotify’s all-time payouts to music rights holders are approaching $40 billion.
When you consider the growth of the overall royalty pool paid out to rights holders and the expanding number of artists succeeding thanks to streaming, we believe the future is incredibly bright for artists’ careers. The IFPI’s 2023 report showed that the global recorded music industry in 2022 has officially surpassed the 1999 peak — reaching $26.2 billion as an industry.
Is streaming only helping music’s biggest stars?
No. Streaming has fundamentally changed the music ecosystem — lowering barriers to entry and democratizing access to audio for listeners across the world. Artists no longer need big budgets to create, distribute, and amplify their music around the world.
In 2022, over 275,000 artists were added to Spotify editorial playlists at least once, the large majority of which were discovered through Spotify for Artists’ playlist pitching tool, which is freely available to all artists.
More artists are sharing in today’s thriving music economy compared to the peak of the CD era. In the heyday of CDs, nearly 25% of US sales were accounted for by the top 50 artists. On Spotify in 2022, only 12% of US streams were from the top 50 artists –– meaning that today, revenue opportunities reach far beyond the superstars. Further, in 2022, a quarter of artists who generated over $10K from Spotify are self-distributed, and 35% live in countries outside the top ten music markets.
There are millions of artist profiles on Spotify, yet only a small fraction are generating money. Shouldn’t a higher percentage of all artists on Spotify be making money? Aren’t there 9 million of them?
Our mission is focused on creating opportunities for professional artists to make a living through their work. Every artist is different, and success is not the same across the board.
It’s true that nine million people have ever uploaded a song to Spotify — but just like uploading a video or two to YouTube doesn’t mean that person is trying to be a professional YouTuber, releasing a few songs on Spotify doesn’t indicate a career in music. For example, of the nine million people who have distributed any songs to Spotify, 5.6 million of them have released fewer than ten tracks all-time. Many of these artists are likely early in their careers, hobbyists, or may not be leveraging streaming as part of their career paths.
We estimate that there are around 200,000 professional or professionally aspiring recording acts globally. We see this in Spotify data: 213,000 artists have released at least ten songs all-time (meaning they have a body of work to earn from) and average at least 10,000 monthly listeners (meaning they have been able to attract an audience). We also see this through our integrations with Songkick, Ticketmaster, and dozens of other live and virtual ticketing partners: 189,000 artists had any gig, event, or virtual event listed at some point during 2022, demonstrating commercial activity outside of streaming.
That data suggests a population of between 189,000 and 213,000 artists, but to account for a margin of error in our methodology, we consider 200,000 to be a reasonable estimate — though of course, we acknowledge the difficulty in assuming any artist’s professional intent just from data.
Based on this estimate, you could calculate that more than a quarter (29%) of professional or professionally aspiring artists generated $10,000 in 2022 from Spotify alone (and likely over $40,000 across all recorded revenue sources).
I heard Spotify pays a fraction of a penny per stream. Is that true?
In the streaming era, fans do not pay per song, so we don’t believe a “per stream” rate is a meaningful number to analyze. Spotify, like every major streaming service, pays royalties based on an artist’s share of overall streams across the platform. We call this “streamshare.”
Spotify is focused on maximizing the total size of the payments we are able to make to rights holders — those that pay artists and songwriters — and the data on this site reflects our progress. We pay out more than any other streaming service; in fact, in 2021, Spotify set the record for the highest annual payment to the music industry from any single retailer in history.
And our incentives are aligned with artists — the more revenue we generate, the more payouts for artists. Along with every major streaming service, we pay out nearly 70% of every dollar we generate from music back to artists’ and songwriters’ rights holders.
Still, we understand that artists find it useful to calculate an effective “per stream” rate — dividing the total size of the royalty pool on Spotify by the total number of music streams on Spotify. We dig into that in the “Why does the ‘per stream rate’ appear lower for Spotify than some other streaming services?” question on this page.
Our model drives more fan engagement and generates revenue from more places, which means larger total checks from Spotify to rights holders. That’s why we pay more than any other service. We make some choices that decrease the effective “per-stream rate,” but we believe we are maximizing overall revenue and generating the most possible money for rights holders and their artists and songwriters
If an artist has millions of streams, why don’t they earn more?
Spotify has been around for more than 15 years. We now have more than 500 million listeners who are streaming more songs per month than ever before, which means the activity on the platform increases exponentially.
And streaming services pay based on streamshare, not a per-stream rate.
Spotify pays rights holders on a monthly basis, but our app shows all-time streams rather than how many times a song was streamed this year or this month. Therefore, these all-time stream counts do not correlate with the monthly payout an artist receives from their rights holders.
Because of the growth of streaming and the increase in engagement per user, the meaning of a million streams has changed over the years — lots of tracks are reaching a million streams, and more often than you’d think. In fact, 913,000 songs have now surpassed a million streams, and 281,000 songs received a million streams in 2022 alone. Nearly 350 songs reached a billion streams by the end of 2022. To get a better sense of the Spotify ecosystem, you can play around with the interactive tool on this site, which reflects data as of December 2022.
How does the number of self-distributed artists who generated over $10,000 from Spotify compare over the years?
The metadata available to Spotify and used to calculate this specific figure is different from 2021 to 2022, so it’s not an apples-to-apples comparison. The reason it’s different is because Spotify doesn’t always receive complete metadata from licensors on whether an artist uses an artist distributor. So, we’ve only included artists where we actively receive this data point. And when an artist distributor is acquired or makes changes to their operation, Spotify may lose access to the number of artists self-distributing through that company.
Based on the current set of artist distributors that Spotify receives complete metadata from, the number of self-distributing artists who generated $10,000+ from Spotify alone increased from 2021 to 2022. In 2022, 14,700+ artists generated $10,000+ on Spotify, which is a 200% increase from 2017.
Why does the “per stream rate” appear lower for Spotify than some other streaming services?
In the streaming era, fans do not pay per song and no major streaming services pay per stream, so we don’t believe that a “per-stream rate” is a meaningful number to analyze. Still, we understand that artists find it useful to calculate an effective “per stream” rate or, in other words, a revenue-to-streams ratio — dividing the total size of the royalty pool on Spotify (the numerator) by the total number of music streams on Spotify (the denominator). Both of these numbers are growing incredibly quickly every year.
There are a number of factors that contribute to that ratio looking small, which we understand can seem problematic. We don’t believe it is; we are confident our model is maximizing revenue for everyone.
There are three key business decisions we make to maximize revenue to rights holders. Even though they decrease the effective per-stream rate on Spotify, we believe artists care more about a larger paycheck than a higher per-stream rate.
High Streams per Listener: First, the average subscriber to Spotify listens to more music per month than on other services. That means more listeners discovering more artists, more opportunities to deepen engagement with listeners, and more chances to convert listeners into fans who buy tickets and merch. This engagement — as well as the millions of new Spotify listeners signing up every month — impacts the denominator of the revenue-to-streams ratio.
More Global Audience: Second, Spotify is more popular in countries with lower prices, which makes our revenue-to-streams ratio look lower compared with services not focused on those markets. Meeting listeners at an affordable price for them is the way to generate revenue from these markets that wouldn’t have been captured otherwise. Growing into these territories increases total revenue for the industry and for artists, which increases the size of the royalty pool for rights holders. This impacts the numerator of the ratio.
Ad-Supported Tier: Third, unlike many of our competitors, Spotify runs both a Premium subscription service and a free ad-supported service — so looking at Spotify’s revenue-to-streams ratio next to subscription-only competitors isn’t a direct comparison. While the ad-supported service doesn’t generate as much revenue per user as the Premium service, we’ve conducted extensive testing that consistently shows that when we take the free service away, those listeners turn to non-revenue-generating alternatives, meaning the collective music industry would miss out on revenue. The 2023 IFPI report found that across the industry, revenue from ad-funded streaming increased 14% (to $4.9 billion) in 2022 and now has surpassed revenue from sales of physical formats. This also impacts the numerator of the ratio. Offering an ad-supported service is also one of our most useful mechanisms for getting listeners to pay for music: Roughly 60% of first-time subscribers start out on the Free tier and then later upgrade. Again, this means we are maximizing the revenue for everyone.
How do artists and songwriters get paid?
Spotify doesn’t pay artists or songwriters directly.
Spotify primarily makes money for music from two sources — Spotify Premium subscribers and advertisers on Spotify’s Free tier. Nearly 70% of this money is paid out to music rights holders to what we call the “royalty pool.”
Spotify allocates that royalty pool based on each rights holder’s streamshare on Spotify. This money is not divvied up based on a fixed amount per stream because Premium subscribers do not pay per stream; they pay a subscription fee for access.
From here, we encourage you to check out our “How the Money Flows” video.
Why doesn’t Spotify just charge listeners more?
Spotify persuaded listeners to pay a set price for music monthly, shifting fans away from piracy. 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. In fact, the average adult spending money on music today is spending nearly double compared to during the peak CD era in 1999, and millions more people are spending.
That said, Spotify is always evaluating pricing in each of our markets, and we’ve increased pricing in a number of them. Since Spotify and artists’ rights holders share in the same pool of money, our incentives are totally aligned: We both want to generate as much revenue from listeners and advertisers as possible.
Over the years we have made a number of price increases in different markets around the world, and we will continue to do so when it makes sense based on a variety of local and regional factors.
Should the numbers you’re presenting around artists’ revenues be much higher?
We’re focused on growing the total amount of money Spotify pays to artists’ and songwriters’ rights holders, so the data on this site focuses on one revenue source: Spotify royalties. We expect the growth rates shown on this site to continue. For example, the number of artists generating over $100,000 per year has grown by 135% from 2017 to 2022. In fact, the number of artists reaching every revenue level on Spotify (e.g., $10K, $100K, $1M/year) has more than doubled in the last five years.
Spotify is just one of several music streaming services, representing over 20% of all global recorded revenue. That means you can multiply Spotify revenues on Loud & Clear by at least four to estimate what each artist might be generating across all recorded revenue sources.
The numbers on this site also do not account for revenue generated from touring, merch, or other sources. And Spotify can provide a multiplier effect — fan bases built via Spotify can be monetized by artists and their teams through these other revenue streams.
You shared that an artist’s Spotify royalties can be multiplied by four to estimate total music revenue. Is that really true?
Most of the data on Loud & Clear focuses just on what an artist has generated on Spotify alone. To get a fuller picture of what an artist might have generated across all revenue streams, there are three ways to think about it:
Streaming (3x): Spotify represents about a third of global revenue generated from all streaming services. An individual artist’s proportion may vary, based on their genre, fanbase, and marketing strategies, but on average, you can multiply Spotify royalties by roughly three to estimate what an artist may have generated across all streaming services. So $100,000 from Spotify might be $300,000 from streaming overall.
Recorded Revenue (4x): Based on IFPI data, Spotify represents over 20% of global recorded revenue. Recorded revenue means all the money generated from the music recording itself — including streaming, physical sales (CDs, vinyl), sync, performance rights, and digital downloads. Again, an individual artist’s proportion of Spotify revenue can vary, but on average, you can multiply Spotify royalties by roughly four to estimate how much an artist might have generated across all global recorded revenue. So $100,000 from Spotify might be $400,000 in total recorded revenue.
Total Revenue: The figures shared on this site also do not account for non-recorded revenue streams — like concerts, merch, brand sponsorships, and more. These revenue streams are additional to recorded revenue and can vary in size.
How did global currency volatility influence 2022 royalty data?
2022 was a historically volatile and unpredictable year in currency exchange rates. The U.S. dollar (USD) strengthened relative to nearly every other major currency at a level not seen in decades — the USD appreciated over 12% in 2022 (based on the nominal broad dollar index).
Spotify’s artist community is particularly global, generating royalties across dozens of currencies. 72% of Spotify subscribers are outside the US and Canada, and 35% of artists who generated at least $10,000 in 2022 on Spotify come from outside the top ten music markets.
For consistency, we continue to report all our royalty data on this site in USD — converting all revenue numbers from local currency to USD. As a result, the growth rate from 2021 to 2022 for some revenue thresholds can appear lower than past years — due to major changes in currency conversion, not changes in business growth. (Spotify’s Premium subscriber base grew 14% year-over-year to 205 million, and monthly active user totals grew 20% year-over-year to 489 million.)
As an example of the impact of currency volatility on reporting:
- The number of artists generating $1 million (USD) grew from 1,040 in 2021 to 1,060 in 2022 (up 2%).
- The number of artists generating €1 million (Euro) grew from 880 in 2021 to 1,000 in 2022 (up 13%).
How will Spotify achieve its mission?
First, streaming is already the largest source of revenue in the recorded music industry, and we intend to continue growing it by improving our service, expanding into new markets, and ultimately, attracting more listeners and advertisers. In 2022, recorded streaming revenue alone (across all services) was higher than the entire industry’s revenue from all forms of recorded music for each year 2007 through 2017. Our incentives are aligned: We make money when the music industry makes money. And we’ve been growing revenue fast: In 2022, Spotify accounted for well over 20% of all recorded music revenue — up from less than 15% in 2017.
Second, a significant amount of the revenue Spotify makes is reinvested into building tools, resources, and opportunities for artists, songwriters, and the entire music industry — including our investments in personalization, playlisting, and editorial and marketing support, both on and off Spotify. Our goal is to help the industry harness the power of Spotify, drive discovery, and grow fan bases — so that the industry can earn more both on and off Spotify (through merch, sync, ticketing, etc.).
How is streamshare calculated?
Every month, in each country we operate in, we calculate streamshare by adding up how many times music owned or controlled by a particular rights holder was streamed and dividing it by the total number of streams in that market.
So if an artist received one in every 1,000 streams in Mexico on Spotify, their rightsholder or distributor would receive one of every $1,000 from the Mexican royalty pool. The total royalty pool for each country is based on the subscription and music advertising revenues in that market.
Would the user-centric model be more fair?
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. A study from the National Music Centre (CNM) found that the change would result in “at most a few euros per year on average” for artists outside the top 10,000. That research can be viewed here, and a useful summary of that research can be viewed here.
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.
I’ve been reading about artists and songwriters selling their catalogs to investment firms – why is that happening?
Music catalogs are more valuable than ever. Because of streaming, music now has significant potential to make money well past the initial sale or release. This means an artist or songwriter who hasn’t put out new material in a decade or two, yet maintains a significant fan base, can still generate healthy revenues year after year. For example, 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 of 3,400 artists, on average, generated $433,000 from Spotify alone in 2022 (and likely well over $1 million across all streaming services).
The rising value of artists’ and songwriters’ catalogs serves as another important signal of optimism for the future value of music.
How is Spotify measuring payouts on this site? Why doesn’t this focus on what artists actually take home?
We would love to report on the money that artists take home as a result of their Spotify performance — but we do not have insight into each individual artist’s and songwriter’s agreements with their chosen rights holders. We can only report the data that’s available to us, which is the amount of money that has left Spotify.
So the data on this site centers around the royalties generated — for both recording and publishing — that Spotify pays out to music rights holders. We look at each performing artist on Spotify and are reporting how much was paid to their rights holders across their full catalog for each calendar year.
Spotify doesn’t pay artists directly. We pay rights holders selected by the artist — whether that’s a major label, independent label, aggregator, distributor, or otherwise. You can check out more from our “How the Money Flows” video here.
What was the methodology used for your Publishers, Songwriters and CMOs Revenue infographic?
Economist Will Page used publicly available data from the 2020 IFPI Global Music Report to reverse engineer payments to songwriters, publishers, and their CMOs for revenues that came from the consumer, namely purchasing CDs and downloads, and listening to ads on or subscribing to streaming services. The methodology factored in regional differences in licensing and trends in the terms of trade between rights user and holder.
How can I grow my audience and find success on Spotify?
We want Spotify to be the most effective and valuable place for artists and their teams to grow their fanbase at every stage of their career. That’s why we’re building new tools for the more than one million artists who use Spotify for Artists each month. You can explore Spotify for Artists features here. Be sure to check out Artist Pick, Canvas, Merch, Promo Cards, Marquee, Discovery Mode, playlist pitching, Songwriter Pages, Made to Be Found, Noteable, In Focus, Fan Study, and more to help grow your fanbase.
Spotify is spending millions on podcasts. Why isn’t the music industry seeing that money instead?
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. All subscription fees paid by listeners go into the music royalty pool; podcasters are typically compensated by selling advertising within their podcasts.
Also, we see music and talk being mutually beneficial — they’ve coexisted for years on formats like linear radio (AM/FM). We’re already experimenting with new ways to mix talk with royalty-bearing music that opens up new ways for listeners to dive deeper into the music they discover via podcasts.
How much money does Spotify keep?
Spotify’s share is roughly one-third of the revenue generated from subscription fees and advertising on music for the Free tier.
And this is nothing new. Retailers have always taken a fee for their services — historically an even higher cut. For example, near the height of the CD era, the retailer carried somewhere between 35% and 40% of the CD or cassette sold.
We prioritize growth over profits, so our share is reinvested into building tools and services for artists, maintaining a quality product for listeners, and attracting more users to grow revenue from. Investment includes everything from cloud computing and credit card fees to product updates and new technologies, from developing playlists and experimenting with new ways for fans to engage with your music to building tools and resources to help guide you through the process.
How can I put Streaming Numbers in Context for my home market?
The Streaming Numbers in Context section of the site focuses on global figures for the sake of simplicity, but one useful indicator for how local stream counts stack up is to check out your local Spotify Chart. You’ll find that the amount of streams it takes to chart in different territories around the world can vary quite a bit. For example, what it takes to chart in Malaysia and Bulgaria can look pretty different from Australia and Mexico. Also, through Spotify for Artists, artists can view the geographic breakdown of their listeners (by city and by country) in the Audience tab of their dashboards.
How do you account for inflation on the site?
Any time we refer to inflation on the site, we’ve made a simplistic assumption that the global inflation rate has been 2% per year, consistent with Federal Reserve and Bank of England guidance. Where relevant, we’ve also compared it to specific US figures with the CPI calculator.