The Swedish giant recognises the 'loud and clear' criticism of its business model. Euronews business looks at Spotify's figures.
ADVERTISEMENTSpotify paid out a total of $9 billion (€8.3 billion) in streaming royalties in 2023, making it the largest annual payment from any company to the music industry.
The payout, which includes earnings distributed to artists and rights holders, was revealed in its recently published 'Loud and Clear' report.
Previously, the giant Swedish digital music, podcast, and video service had been urged to "increase transparency" following criticism that it was failing to do so.
"This is everything we know about how much is being paid out, how many artists are achieving different levels of success," said Charlie Hellman, Spotify's vice president and global head of music product.
"So, everyone can have access to the information and be sort of up to date with the state of the industry."
Royalties paid out on basis of 'streamshare'
According to the report - the first of which was published in 2021 - payment numbers have nearly tripled over the past five years.
In 2023, 1,250 artists earned more than $1 million (€900,000) each in recording and publishing royalties, while 11,600 earned more than $100,000, (€92.180) and 66,000 earned more than $10,000 (€9.220).
Spotify and other streaming services pay royalties to music owners based on a share of the total streams, known as "streamshare". This involves counting how many times songs from a specific owner are played and dividing that number by the total streams in the market.
How is the business of music changing?
The music landscape is changing, according to the report. In 2023, more than half of the 66,000 artists were from countries where English was not the first language. Songs in Spanish, German, Portuguese, French, and Korean were among those whose performances stood out.
According to Luminate's 2023 year-end report, the global music industry achieved a new single-year record by exceeding four trillion streams for the year.
"There are millions of people who've uploaded a song at least once but that doesn't really speak to whether they're an artist, or if they're doing this more as a hobby," Hellman says.
Additionally, "indie" artists, who distribute their music independently or are signed to independent record labels, made $4.5 billion (€4.1 billion), half of all the royalties paid by Spotify.
The platform said that, starting from 2024, it would no longer pay for songs with less than 1,000 streams per year.
Spotify in December announced a 17% reduction in its global workforce, the third round of layoffs during 2023.
