March 31, 2022

Spotify Expresses Willingness to Adopt Fan-Powered Royalty Model

Spotify has officially claimed that more than 1,000 artists earned over $1 million each from on-platform streams during 2021.

The Stockholm-based service disclosed this stat and other noteworthy figures in its newly updated (for 2021) Loud & Clear resource. According to the expansive document – which claims at the outset that “Spotify has paid over $30 billion in royalties to the music industry,” including north of $7 billion in 2021 – last year saw the catalogs of 1,040 artists make $1 million+ apiece from “recording and publishing royalties” on Spotify.

This total represents an increase of 180 from 2020 (which delivered $1MM+ to 860 artists) and 320 from 2019 (720 artists), per the analysis. Spotify likewise relayed that 130 artists’ work had generated more than $5 million during 2021 (up from 100 in 2020).

Meanwhile, 450 artists earned at least $2 million in on-platform royalties (up from 360) during 2021, Spotify stated, against 2,170 artists for $500,000 (up from 1,800), 9,500 for $100,000 (up from 7,800), 16,500 for $50,000 (up from 13,400), 52,600 for $10,000 (up from 42,500), 81,500 for $5,000 (up from 67,700), and 203,300 for $1,000 (up from 186,600).

Next, the multifaceted breakdown dives into a description of Spotify’s royalty system – which is “based on an artist’s share of overall streams across the platform” as opposed to actual fan engagement. (Of course, the latter benefits acts with highly dedicated fanbases but not billions of streams.)  

Included with said description is a tool that calculates artist and song rankings for an inputted monthly listener or stream total, respectively. For instance, entering 1,000,000 all-time streams into said tool reveals that a song with the play count “would be in the top 719,000 tracks on Spotify globally.” Similarly, “1,000,000 monthly listeners would be in the top 9,000 artists on Spotify globally.”

Bearing in mind Spotify’s emphasis upon current payment totals and ultra-high song-play volumes, a three-minute video then hypes streaming (and Spotify’s role therein) while reiterating the nuances of the platform’s payouts. An artist-definition section (“chart toppers,” “DIY,” etc.), a publishing-focused “industry context” page, a bunch of articles involving “Tips for Beginning Songwriters and Producers,” and “additional resources” yet follow.

Just in case this tidal wave of information wasn’t enough, Spotify – which has faced criticism over its per-stream royalty rate as well as its non-music expenditures – closed out the piece with some 4,400 words’ worth of answers to questions like “Is streaming only helping music’s biggest stars?” and “Would the user-centric model be more fair?”