“Loud & Clear”, the new report on how Spotify pay rights and royalties to artists, authors and record labels, it signals important steps forward and, as usual, new records. The first: in the course of 2021 the platform led by Daniel Ek distributed 7 billion dollars against 5 the previous year. The revenues from streaming music alone exceeded those that the entire music sector achieved annually between 2009 and 2016, that is, considering all sources (streaming, physical media, synchronizations, downloads, secondary rights). Another first: over a thousand artists have grossed one million dollars only from the reproductions on the platform while 450 have exceeded the two million and 130 the five million.
This, however, is the vanguard of the most listened to, popular and rich that can perhaps blind. On the other hand, going down on thresholds that are somehow more accessible, the main data seems to be that on $ 100mila. Not even 10 thousand artists around the world, to be precise 9.500have achieved that amount of revenues considering all the types of rights considered, ie editions and so-called “masters”. A nice 120% increase from 2017, of course, but are they many or few? Instead, they exceeded the quota of 50 thousand dollars 16,500 artists, again with a jump of 120%. Perhaps the most interesting parameter, however, is that of 10 thousand dollars, around which in fact the platform has spent more than one of the report cards that can be viewed here: a figure that is difficult to live with, of course, but which gives the idea of a certain success achieved. from your own music. To cash in more than that threshold were 52,600 artists with its own catalog.
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A more democratic distribution
Certainly, and in general, the redistribution is widening. At all levels, from a thousand dollars to five million, the numbers go up and the amount of names (newcomers, historical names, meteors, little-known authors specialized in specific genres, pop stars and so on) that have reached each of these milestones is doubled compared to 2017. If you add revenue from other streaming platforms as well, Spotify’s report says, that’s numbers that have to be multiply at least four times. Incidentally, although numbers may appear to be basically low when compared to the global music market, there is another small step to consider in terms of democratization: if in the golden years of CDs almost 25% of album sales were attributable to the top 50 artists of the time, in 2021 only 12% of US streams are in the top 50. A sign that there are more and more opportunities even beyond the absolute superstars. An example? 28% of those who have reached $ 10,000 in royalties distributes its music independently using platforms such as DistroKid, TuneCore or CD Baby, with a jump of 171% compared to five years ago.
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Not only that: in addition to distribution and monetization, there is also the speed with which certain goals are reached. According to the report, in fact, over 10% of the artists who crossed the threshold of 10 thousand dollars in 2021 they had released their first song over the last two years. Some (about 350) even touching 100 thousand dollars. Still in terms of widening the audience of beneficiaries, Spotify reports that among those who have managed to go beyond that goal, 34% live in countries outside the ten main markets of the International Federation of the Phonographic Industry (Australia, Canada, China, South Korea, Italy, France, Germany, Japan, United Kingdom and United States). The message is that streaming, a bit like it happens with series produced locally and distributed all over the world on Netflix, opens up very complex fronts and limelights in very different markets. Last year, 80 were added.
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They also smile record majorswhich in 2021 brought home something like 12.5 billion dollars from the streaming sector and over 4 only from Spotify. While the authors and the holders of the publishing rights went from streaming a total of 3.5 billion dollars, a figure higher than the revenues obtained in what Spotify calls the “era of CDs” even at maximum circulation. In general, since Spotify has been operational, the billions collected by authors and labels for all types of rights are 30.
How Spotify pays: the “streamshare”
Like other streaming platforms, Spotify pays royalties to artists, labels and publishers based on the share of an artist’s catalog on the platform’s total streamsa parameter that the group calls precisely “streamshare“. Rather than thinking about the value of the single reproduction, in short, the money is distributed on the basis of the slices, albeit small, that each author ends up occupying in the overall audience. For this reason, what could have been a large amount of streams five years ago, with fewer artists and fewer plays, today can be much lower in percentage terms with the increase in available songs and hours of listening by users (by the way: they are 406 million of which 180 paying in 184 markets). To get an idea, it is worth considering that over 238 thousand songs were played over a million times in 2021 alone.
“Just like in the hyper-competitive worlds of film or sport, it’s hard to make it into music. I understand it – wrote Ek commenting on the numbers of 2021 – but the figures we share show that Spotify is improving the music industry of the past and more and more artists are able to stand out in the streaming era ”. Except then add, perhaps referring to the spasmodic attention recently paid to podcasts, that “music matters. For the world and for Spotify. This is where we started and what continues to inspire us as we build the most valuable platform for artists. We’re not done yet ”.