Spotify wants to ensure more transparency in the streaming business. To this end, the Swedish company launched its own website, Loud & Clear, last year. Here you can see current figures for the use of Spotify.
In the meantime, there are initial findings (which can be viewed by the public) about the music year 2021 on Spotify. Accordingly, the Swedes paid 7 billion US dollars to the music industry worldwide. According to a statement by Spotify, no other company is injecting so much money into the industry.
Streaming continues to boom
No wonder: “In 2021, music industry streaming revenue exceeded total industry revenue from music sales (including digital, physical, dubbing and performance) for any single year between 2009 and 2016.”
According to the statistical analysis, more than 50,000 artists around the world have made sales of 10,000 US dollars and more via Spotify alone. The question remains whether this is progress when most of the income comes from the streaming business, or whether it is a step backwards for many medium-sized and small musicians compared to a world without streaming.
At least the Swedes show that in relation to the breadth of economic growth in the industry, more protagonists are involved who bring in substantial sums, unlike in the CD era. “At the time, the top 50 artists accounted for nearly 25 percent of US album sales. On Spotify, the top 50 artists accounted for just 12 percent of US streams in 2021 — meaning the revenue opportunities today extend well beyond the ‘superstars’.”
More profit through streaming
Spotify therefore points out that the major record companies would have made a profit of over 4 billion US dollars in 2021 – which would hardly have been possible without the success of streaming, at least that’s what Spotify says for itself. Almost a third (28 percent) of all artists who are successful by their own standards (i.e. earning more than 10,000 US dollars) publish independently or with smaller distributors; a 171 percent increase compared to 2017.
“Artists can generate income faster and start successful careers through streaming,” Spotify points out. “More than 10 percent of artists (approx. 5,300) who generated more than $10,000 on Spotify in 2021 had their first songs released in the past two years. In 2021, 350 of them made $100,000 from Spotify alone.”
In the meantime, almost half (43 percent) of the listeners’ interest is no longer just focused on the ten big music markets.
The question remains what all this really means for musicians. The vast majority doesn’t see any of this money that Spotify pays out until it is passed on by the rights holders, i.e. labels, publishers and others. That depends on the contracts that have been concluded.
And what do the musicians get out of it?
Spotify CEO Daniel Ek recently declared loudly that he wanted to help a million musicians “live from their art”, but the streaming service is still a long way from it. Of course, that’s also because most are tied to set royalties that Spotify didn’t negotiate with them. They only take effect after all kinds of advances and expenses have been deducted and, to make matters worse, in the Spotify statistics they are not dependent on the number of streams for a song, but specifically on the proportion that the streams of a specific act have in comparison to all other acts Spotify has.
What role the protest by Neil Young and Co. has on Spotify’s sales figures is of course still unclear. The songwriter had his albums removed from the streaming portal to his own economic disadvantage because Spotify was spreading conspiracy theories about the corona virus in his Joe Rogan podcast. Other bands and musicians joined the protest. To date, their catalog hasn’t returned to Spotify, and Rogan is still on the air.
As Spotify boss Daniel Ek would say: There is still a lot to do.