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 and to provide increased levels of clarity and transparency about this topic to the artist community. In sharing more information, we aim to answer questions and share useful resources about today’s streaming industry and Spotify’s role within it. 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.
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What’s new on Loud & Clear this year?
On March 19, 2024, we updated Loud & Clear with new information:
- We added 2023 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;
- We added new “How They Made It” videos spotlighting artist stories; and
- We updated the Additional Resources section with partner guides and reports
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, making it harder for artists to break through. And in some markets, not all artists are 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. And again, there is the issue of limited space – not all artists are able to have their CD or vinyl on a shelf in a physical record store.
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 well over 200M Premium subscribers, and more than 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 2023, only 13% 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 now stand at ~$48 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* 2024 report showed that the global recorded music industry in 2023 has far surpassed the 1999 peak — reaching $28.6 billion as an industry.
*All statements on this website attributable to IFPI represent Spotify’s interpretation of data, research opinion or viewpoints published as part of the IFPI Global Music Report in March 2024, and have not been reviewed by IFPI. Each IFPI Publication speaks as of its original publication date and not as of the date of this report (March 25, 2024).
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.
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 2023, only 13% of US streams were from the top 50 artists –– meaning that today, revenue opportunities reach far beyond the superstars.
We’re seeing that Spotify royalties are powering artists’ careers at all stages. In 2023, 66,000 artists generated $10,000+ (up from 23,400 in 2017). And careers don’t just start on Spotify, they grow on Spotify. Of the 23,400 artists who generated $10,000+ in 2017, nearly half generated more than $50,000 in 2023, and likely $200,000 overall across all recorded revenue sources.
On the other end of the spectrum, Over 80% of the artists who generated $1,000,000 on Spotify in 2023 didn’t have a song reach the Top 50 of Spotify’s Daily Global Songs chart. In the streaming era, the charts aren’t big enough to contain all of the artists finding success. Fans’ tastes are more diverse, and the royalty pool is increasingly massive ($9B!) – which means more revenue to a wider range of artists, many of whom aren’t household names and didn’t need a “hit” song to have a big year.
Ok, but is it just artists in a handful of markets who are benefiting?
We know that streaming lowered barriers to entry. But the impact on artists’ livelihoods, and the global diversity of that impact, is becoming more clear. Of the 66,000 artists who generated over $10,000 on Spotify in 2023, more than half are from countries where English is not the first language. Artists who — in the past — might have struggled to break through are now finding their audiences, and the music industry today is a more diverse and accurate reflection of the world we live in.
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 10 million of them?
Our mission is focused on creating opportunities for emerging and 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 over ten 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 ten million people who have distributed any songs to Spotify, eight 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 225,000 emerging or professional recording acts globally. We see this in Spotify data: 235,000 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 initial audience). We also see this through our integrations with Bandsintown, Ticketmaster, and dozens of other live and virtual ticketing partners: 210,000 artists had any gig, event, or virtual event listed at some point during 2023, demonstrating commercial activity outside of streaming.
That data suggests a population of between 210,000 and 235,000 artists, but to account for a margin of error in our methodology, we consider 225,000 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 2023 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, Spotify paid the music industry more money than ever in 2023: $9B+. That figure has nearly tripled over the past seven years, and represents a big part of the $48B+ Spotfy has paid since its founding.
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 roughly two-thirds 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 600 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, 1,120,000 songs have now surpassed a million streams, and 329,000 songs received a million streams in 2023 alone. That’s up from 281,000 songs in 2022. 550 songs reached a billion streams by the end of 2023. 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 2023.
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 2024 IFPI report found that across the industry, revenue from ad-funded streaming increased 10% (to $5.3 billion) in 2023 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: More than 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. Approximately two-thirds 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 the following videos: How the Money Flows, and How the Money Flows (Publishing Edition).
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 so that we can keep innovating in changing market conditions. We’ve recently increased pricing in a number of them across our different Premium subscription plans. 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.
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 170% from 2017 to 2023. And, Spotify royalties are powering artists’ careers at all stages. In 2023, 66,000 artists generated $10,000+ (up from 23,400 in 2017). 11,600 generated $100,000+ (up from 4,300 in 2017). And 1,250 artists generated $1 million+ (up from 460 in 2017).
Spotify is just one of several music streaming services, representing nearly a quarter 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 nearly 25% 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 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 2023, recorded streaming revenue alone (across all services) was higher than the entire industry’s revenue from all forms of recorded music for each year 2003 through 2019. Our incentives are aligned: We make money when the music industry makes money. And we’ve been growing revenue fast: In 2023, Spotify accounted for nearly 25% 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.
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 and songwriters actually take home?
We would love to report on the money that artists and songwriters 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 generated on Spotify.
So the data on this site centers around the royalties generated — for both recording and publishing — for music rights holders. We look at each performing artist on Spotify and are reporting how much was earned across their full catalog for each calendar year.
Spotify doesn’t pay artists or songwriters directly. We pay rights holders selected by the artist or songwriter — whether that’s a record label, publisher, independent distributor, performance rights organization, or collecting society. From here, we encourage you to check out the following videos: How the Money Flows, and How the Money Flows (Publishing Edition).
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 Analytics, Playlisting, Campaign Kit, Canvas, Clips, Merch, Artist Pick, Promo Cards, Songwriter Pages, our Songwriting hub, Made to Be Found, In Focus, Fan Study, and more to help grow your fanbase.
If you’re looking for tips, we’ve put together these promotional + engagement best practices and a guide to preparing for release day
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.
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.
I’ve read a lot about artificial streaming and noise on streaming services. How does this impact the Spotify royalty pool?
As Spotify payouts to the music industry continue to grow – over $48B and counting – we want to make sure that the money is going to the people our platform is designed to enable: emerging and professional artists.
However, as the royalty pool and catalog on Spotify have surged, three particular drains on the royalty pool have now reached a tipping point. So, we’re working in close collaboration with industry partners – artist distributors, independent labels, major labels, label distributors, and artists and their teams – to introduce new policies to (1) further deter artificial streaming, (2) better distribute small payments that aren’t reaching artists, and (3) rein in those attempting to game the system with noise. While each of these issues only impacts a small percentage of total streams, addressing them now means that we can drive approximately an additional $1B in revenue toward emerging and professional artists over the next five years.
You can read more about the new policies here.
Why don’t songs with less than 1,000 annual streams earn recording royalties on Spotify anymore?
In November 2023, we announced a set of new royalty policies coming to Spotify in early 2024, aiming to direct an additional $1 billion to emerging and professional artists over the next five years.
One of the new policies is that tracks that don’t have at least 1,000 streams in the past year will no longer generate recording royalties on Spotify. Spotify makes no additional money under this model, and the policy has no impact on the total size of the music royalty pool paid out by Spotify.
This policy targets the population of tens of millions of tracks on Spotify that generate only $0.03 per month on average. In the aggregate, these tracks with under 1,000 annual streams represent 0.5% of total streams (and therefore 0.5% of the total royalty pool). Now that Spotify’s royalty pool has become so large — $9B+ in 2023 alone — 0.5% is now a material amount, around $40 million.
In developing this policy, our focus was on making sure as much money as possible reaches the people our platform is built to serve, emerging and professional artists. Because labels and distributors require a minimum amount to withdraw (usually $2-$50 per withdrawal), and banks charge a fee for the transaction (usually $1-$20 per withdrawal), this money often doesn’t reach the uploaders. And these $0.03 monthly payments are often forgotten about.
We believe it’s more impactful for these tens of millions of dollars per year to increase payments to those most dependent on streaming revenue — rather than being spread out in tiny payments that typically don’t even reach an artist. 99.5% of all streams are of tracks that have at least 1,000 annual streams, and each of those tracks will earn more under this policy.