Spotify paid out $ 10 billion to the music industry in 2024 – some $ 1 billion more than last yearthe previous record – which made its total about $ 60 billion since it was founded in 2006. The company made the announcement in one Blog posts Tuesday morning.
Although that figure may seem doubtful considering how many musicians do from streaming, it is important to remember that Spotify (like most streaming services) pays rights holders, usually a label and music publisher, which then distributes the money to musicians and songwriters after to have taken their percentage. While the streaming economy leaves much to be desired when it comes to compensating creators, the debt is not entirely on streaming services.
In 2023, the company said it pays almost 70% of each dollar it generates from music back to the industry, generates its music revenue from two sources: subscription fees from its premium platform that pays subscribers and fees from advertisements on music on its free tier. These rights holders include record companies, publishers, independent distributors, organizations for performance and collection of communities.
The news also comes two days after Spotify reached a new business with the world’s largest music company, Universal, which sees more favorable royalty payments to musicians from the service’s audio books-music packages “which was announced last year, which significantly reduced payments to songwriters.
In Tuesday’s announcement, Spotify VP notes for the music industry David Kaefer how far the industry has come since streaming mainly saved it from a 15-year-old tail of illegal download.
“In 2014, the music industry reached a low point when global recorded music revenue hit $ 13 billion,” he writes. “Spotify’s annual contribution at that time was about $ 1 billion, with about 15 million paying subscribers. In 2024, Spotify paid a single record of $ 10 billion to the music industry – a total of $ 60 billion since the foundation.
“For many people, these figures can go in one ear and the other. And they might ask why Spotify continues to scream about it. This is because the system we have built together works, and where we are now is just the beginning. Today, there are more than 500 million paying listeners over all music streaming services. A world with 1 billion paying listeners is a realistic goal that we should collectively set. ”
He continues to say that Spotify is the highest paying subscription -streaming services as well as the largest (a place of claim cannot independently verify).
“There are some things specific to Spotify that do it not only the most popular subscription -streaming service but also the highest paying,” he continues.
“1. Retention is priority number one, and detention is driven by personalization, curation and product innovation. Fans like the recommendations, the expert-editorial curation and surprise and-ignition moments such as AI DJ, day list and wrapped, as well as access to non-music content …
“2. We offer an ad supported free level, while some services do not. In addition to the advertising dollars, this generates, more than 60% of premium subscribers once were free tiere users. Getting users who do not expect to pay for music and deepen their commitment means that they are more likely to become subscribers in the future.
“3. We are available in more markets and to local price points and meet people where they are. A decade ago, there was a general view that you could not make money in some markets. But the journey to get the world to pay for music means making long -term investments. Today we see tremendous growth in markets such as India, Brazil, Mexico and Nigeria. These are places where our investments pay off. “
Spotify also estimates that “2014 generated approximately 10,000 artists at least $ 10,000 a year on Spotify. Today, over 10,000 artists generate over $ 100,000 per year from Spotify alone. “
The company stated in 2023 of its royalty distributions: “These figures represent revenue generation from Spotify alone. When they took into account revenue from other services and registered revenue streams, these artists probably generated 4x this revenue from recorded music sources overall. “
Although additional details were not available, the company said they will be divided into their annual High and clear reportWhich will be updated in the coming weeks.
