Spotify recently released its annual Loud & Clear report, highlighting the improvements in its payout system and the overall growth of the music streaming industry. According to the report, Spotify paid out a record $10 billion to the music industry in 2024, marking a significant increase from previous years. However, despite these claims, many artists continue to express dissatisfaction with the compensation they receive from the platform.
Spotify’s Perspective
Spotify’s Loud & Clear report aims to provide transparency about how artists earn money through streaming. The company emphasizes that its payout model is based on streamshare, meaning that if an artist’s catalog accounts for 1% of total streams, they would earn 1% of total royalties. This model, according to Spotify, ensures that payouts are proportional to the popularity of the music.
For the first time, an artist who received one in every million streams on Spotify generated over $10,000 on average in 2024, which is ten times what the same streamshare would have generated a decade ago. Spotify also highlighted that the number of artists generating significant income from the platform has increased, with more artists earning between $1,000 and $10 million annually.
Artists’ Concerns
Despite these positive figures, many artists argue that the payouts are still insufficient. A number of Grammy-nominated songwriters recently boycotted Spotify’s Grammy party, protesting against what they see as decreasing royalties. According to Billboard, a change introduced by Spotify last year could result in songwriters losing about $150 million over 12 months.
Additionally, a report from Duetti found that Spotify pays artists $3 per 1,000 streams, which is significantly lower than other platforms like Apple Music and Amazon Music, which pay $8.80 and $6.20 per 1,000 streams, respectively. This disparity has fueled ongoing debates about fair compensation for artists in the streaming era.
The Broader Impact
The Union of Musicians and Allied Workers (UMAW) has been vocal about the need for fairer compensation for artists, particularly independent and smaller artists who struggle to make a living from streaming royalties[2]. In response to these concerns, Congresswoman Rashida Tlaib and Congressman Jamaal Bowman introduced the Living Wage for Musicians Act, which aims to increase streaming royalties for musicians to one cent per stream.
While Spotify’s report attempts to address these concerns by explaining its payout model and highlighting the overall growth in artist earnings, the dissatisfaction among many artists suggests that there is still a long way to go in achieving fair compensation for all musicians.
The debate over Spotify’s payouts highlights the complexities of the music streaming economy. While the platform has made strides in increasing its payouts and supporting a diverse range of artists, many musicians feel that the current compensation model does not adequately reflect the value of their work. As the industry continues to evolve, finding a balance that ensures fair compensation for artists while maintaining the viability of streaming services will be crucial.
What are your thoughts on this issue? Do you think streaming platforms should change their payout models to better support artists?
