Spotify Paid $10B to the Music Industry in 2024, $1B More Than Last Year
55 comments
·February 4, 2025bearjaws
basisword
>> Spotify pays out 80% of its money to its creators
This pisses me off every time I see it. It makes Spotify look great and that's why they share it. It completely ignores the fact that they offer a free plan that a large percentage of their users enjoy.
The important figure in my mind is the per stream rate and when I last checked Apple was paying double the rate Spotify does (because Spotify's per stream rate is dragged down due to its free users).
Artists don't have a way to say to Spotify, only show my music to premium users and pay me a higher rate. It's one (of many) ways in which Spotify takes advantage of artists for its own gain. Another being their new policy to not pay artists who get less than 1000 streams on a track in a 12 month period. They just blanket decided they were going to keep that money for themselves.
jppope
Not sure you remember where we were in 2012. We've come a long way from listeners not paying at all to $10B. The system is far from perfect but it is better than it was
basisword
Of course, and streaming was always going to be the best solution. But unfortunately it's a market where there are a few big players and they can use that power in an abusive way. Spotify can do better. And puff pieces where they brag bout 'percentage of revenue' or speak in absolute numbers are bullshit and should be called out as such.
I mean this should be criminal given their market power:
> their new policy to not pay artists who get less than 1000 streams on a track in a 12 month period
It may not be much to the individual artists (at most a few hundred $ a year in the extreme cases) but it's a nice chunk of change for Spotify to pocket.
pjc50
> only show my music to premium users and pay me a higher rate
Don't forget that alternatives which pay artists and labels zero are forever lurking in the wings.
basisword
I'm not sure how much I believe this argument. I think the number of people under 30 that can pirate music and manage to load it on to a phone is smaller than you think. Not to mention the fact that being limited to listening to only the music you have pirated (and have storage capacity for) is probably a bizarre concept to younger people who are pretty used to paying a small subscription fee for access to everything.
bongodongobob
Yeah, well y'know what? As a former musician, Spotify is where indies who can't get a record deal go because they aren't marketable. And no one is going to start paying $100/mo or whatever it is that would make the millions of nobody artists profitable. You pay $40 and get global distribution. That's a sick deal. If you can't properly promote shows and generate income, you probably don't deserve it. Not everyone can be famous, not everyone can make a living off of art. 0.1% can and it's always been that way. The expectation that you can toss some music on Spotify and make significant passive income is absurd.
basisword
>> Spotify is where indies who can't get a record deal go because they aren't marketable
Maybe as a 'former musician' you're a bit out of the loop? But indies don't 'go to Spotify'. You pay $40 to CDBaby or similar distribution services (DistroKid etc) and they distribute your track to pretty much all streaming services and digital music stores. Then they collect the payments for you. Nobody is picking and choosing which music streaming service to be on.
scarface_74
Spotify is getting “killed” because it was always a bad business to be in when your costs - payments to labels - scale linearly with your revenue. The exact opposite of a normal tech company that has high fixed costs and very low marginal costs.
> Apple and Google don't even need to turn a profit on their platforms, and both of them are hurting Spotify directly by taking 30% of their subscription payments. Neither of them even directly report revenue from their services.
This is not true. Spotify hasn’t allowed in app purchases of subscriptions in almost a decade.
jsnell
> This is not true. Spotify hasn’t allowed in app purchases of subscriptions in almost a decade.
That is not true either. Spotify's Android app allows purchasing Premium in-app, with Spotify as a payment provider. I believe it's also the case that Apple Music on Android has in-app purchases, with Apple as the payment provider.
jsnell
> Apple and Google don't even need to turn a profit on their platforms, and both of them are hurting Spotify directly by taking 30% of their subscription payments.
I think you mean just Apple there. Spotify on Android has in-app Premium subscriptions using Spotify as the payment provider (at the same price as Premium on the web).
fullshark
> Spotify pays out 80% of its money to its creators,
Creators or rights holders? There's a huge difference.
ganoushoreilly
While true, its regularly implied that the creators are being screwed by Spotify when in fact it would be between them and the rights holders and Spotify has nothing to do with that relationship / contract.
vips7L
Isn't it the creators choice to sell their rights to a publisher? Is anyone holding a gun to their head?
itsoktocry
>It's a shame
What's special about Spotify in this situation? It's also a behemoth with at-least-somewhat-controversial standing in the music community. It's not like it's the little guy fighting the good fight.
Personally, I think YouTube Music is better anyway.
tgv
> Spotify pays out 80% of its money to its creators
The article says "nearly 70%" in 2023. Like Apple. So they would get to keep $4.2B for themselves. That's quite a lot.
It also matters that Spotify undercut other ways of distributing music, effectively reducing income for artists.
> Meanwhile, TikTok ...
Of course, there's always a worse one.
efsavage
> effectively reducing income for artists.
Does it though? Revenues are off their 90s peaks, but coming back[1], and keep in mind that in the 90s a _huge_ portion (~50%) of that went to the retail store and physical media manufacturing.
[1] https://www.riaa.com/u-s-sales-database/ [2] https://en.wikipedia.org/wiki/Compact_disc
jppope
thank you for providing links and reminding everyone what the world was like before streaming
thunkingdeep
If you login to Spotify on the website you can get a better deal and then you can sign in on your phone and it will work like normal.
If they got into trouble I assume they’d just make all the users do it that way…
bearjaws
That is an exclusive back door deal with both Google and Apple, that was likely only created because of how much antitrust pressure they were under. Times are changing, I wouldn't be surprised at all if Apple backs out of the deal over time.
permo-w
they mean that you can pay for spotify without it being through the app store or play store, meaning that Apple and Google can't take a cut, meaning that it's cheaper.
that's not some kind of deal, that's just how it works.
scarface_74
There was never a “back door deal”. Very few of the subscription streaming services allow in app purchases.
Always42
Not everybody pays for subscription through those platforms afaik
scarface_74
Actually no one does.
barbazoo
I didn’t even know I could. Not that I want to obviously.
Y-bar
I think Spotify's payment model is flawed, not the large number they pay out, but how they distribute it.
If I pay them EUR 10 per month and listen to 200 songs by seven artists/bands, I would like Spotify to first take what they need to run the service (and make a profit) from the money. Then I would like the rest of my payment to be divided among the artists of the songs I listened to.
Because Spotify seems to pool all payments into one large sum, if an artist has some fans who listens 500x each to their songs then those fans will "siphon off" my payment to their favourite artist.
dahdum
So each listen would have a variable payout depending on how much else you listened to that month? If you only listened to 1 song, the rights holder would receive all of your monthly payment (sans Spotify’s cut)?
That seems overly complex and more volatile. My guess is that there is no pressure from the artists or rights holders to do this. It’s revenue neutral for Spotify after all. Tidal is the most “artist-friendly” service and they don’t work like that.
Y-bar
> So each listen would have a variable payout
Each listen have a variable payout already. If Spotify has EUR 100M in subscription and ad payments this month and 30B listens it will be a different amount paid per listen compared to a month where they had 110M in income and 24B listens.
> That seems overly complex and more volatile
How so? The current system incentives bot activity to game the system by paying for one account, using that to listen to one or two artists thousands of times, netting those artists more than what the account paid Spotify. With my requested system the payout from bots would never be profitable and therefore reduce volatility (and reduce overhead needed to analyse traffic for bot behaviour).
> If you only listened to 1 song, the rights holder would receive all of your monthly payment (sans Spotify’s cut)?
There is no downside at all here, but it seems you think so?
pavlov
Do they pay podcast creators from the same pool?
It really sucks if my subscription money goes to Joe Rogan because some dummy listened to him 10x more than I listened to music.
scarface_74
Joe Rogan and the people Spotify have a contract with sign a contract for a fixed amount.
ghaff
Companies may pretend they have buckets of money but, at the end of the day, it all comes down to the same bottom line. So, effectively yes, the same pool.
melvinroest
Wait what? So people that use the service more support their artists more? That's unfair. I pay the same 10 euro's per month as they do. My use should have nothing to do with it.
If I decide to only listen to one song, then the proceeds of my 10 euro's should go to that artists. At least, I'd find that logical.
I wish I didn't know what you just wrote, but thanks for mentioning it anyway.
tclancy
Wow, that’s a back rub of a puff piece even for a trade rag. Hix In Stix Love Context-free Stats might be a better title. It conflates data from multiple, unrelated years, makes no mention of how their traffic or revenue grew during those years and tries to pass blame onto amorphous “rights holders” who are the ones really taking too much money.
ollybee
A much better model would be that Spotify split the monthly revenue from each user amongst the artists they listened to that month.
ang_cire
I don't use Spotify at all, I still buy my music (direct from the artist if I can) so I have the mp3s. No messy bs with some streaming service that can cut off my music.
_bin_
Q2'23: 343mm MAU
Q2'24: 393mm MAU
They have 114% the users and paid 111% the royalties. Seems reasonable.
johncoltrane
Spotify is part of the music industry.
swarnie
You can argue back and forth over how much they pay and how its distributed.
For me personally its a black and white divide. I pay for Spotify and something gets put back in to the industry or we all pretend its 2005 again and start sailing the high seas so nothing goes back.
I'm sure with a 1gb up/down home connection its easier than ever.
reverendsteveii
secret third option: I like a band so I sail the high seas and then buy merch, or join a patreon, or some other way of cutting out at least some of the most egregious middlemen and directly supporting artists.
ghaff
Most people don't have a home connection like that but I'm not sure it really matters.
The mainstream has generally accepted a music streaming subscription as a much more convenient alternative to routine piracy and has mostly gotten out of the habit of purchasing music whether digital or on-disc. Yes, there are exceptions--probably more than in the population here--but they're certainly not the norm.
maccard
> Most people don't have a home connection like that but I'm not sure it really matters.
It doesn't. Even on a rough 4g connection you can download a full song in about a second and upload one in about 10 seconds.
ghaff
A lot of people here vastly overvalue a very high speed internet connection when it rarely matters past some (relative low bandwidth on a reliable link) connection for most.
Nursie
It's not black and white when there are other platforms that do a better job at distribution.
wnevets
thats it?
It's a shame Spotify is just going to get killed by large music groups and anti-competitive platforms from Google and Apple.
Spotify pays out 80% of its money to its creators, but you effectively have large middle men in the way.
Apple and Google don't even need to turn a profit on their platforms, and both of them are hurting Spotify directly by taking 30% of their subscription payments. Neither of them even directly report revenue from their services.
Think about it, Apple or Google make more net profit from Spotify subscriptions than Spotify does.
Meanwhile, TikTok only pays per the number of videos using your music, not the number of times the videos are played. The only worse deal for artists would to not be paid at all...