Spotify tells Loud & Clear how it contributes to the value of the music sector

 

By Emmanuel Legrand

Spotify has launched a new platform named "Loud & Clear" with the goal “to increase transparency by sharing new data on the global streaming economy and breaking down the royalty system, the players, and the process.”

  Speaking to Variety, Spotify’s head of marketplace Charlie Hellman said the reason for the site is that “artists deserve more clarity about how the streaming economy is working."

  He added: "Obviously, it’s not simple: it’s a complicated ecosystem and Spotify is just one piece of it. As of 2019, we represent 20% of the recorded-music industry. But we want to do our part to be more transparent with the data we have about artists achieving levels of success. We’re all hearing that the industry is experiencing incredible growth: who’s benefiting? Hopefully this gives some answers.”

Payouts to rights holders

  Hellman told Variety that overall payouts to rights holders have grown 50% in the past five years and that the number of artists who represent 90% of steams has quadrupled in the last six years. "It’s less hit-driven and is distributed across a much larger pool of artists,” he said.

   Spotify's exercise in transparency is undoubtedly driven by the recent scrutiny on music streaming economics and the debate on the remuneration of creators in the digital age in the UK and elsewhere.

  Spotify also forecasts that the music industry will "surpass its 1999 peak in 2025 because of streaming royalties."

A bright future for artists

  Spotify also makes it clear that it does not pay artists and songwriters directly. Instead it pays rights holders such as record labels, distributors, aggregators and collecting societies, who in turn pay artists and songwriters. 

  "How much these artists and songwriters are paid depends on their agreements with rights holders, and everyone is different," explained Spotify in a video. "Spotify also does not control how the money is then divvied up by rights holders and paid out to everyone else who contributes to their work."

   Spotify's message is that the situation of artists has already changed due to the growth of streaming and that it will only get better in the future. A post on the platform Loud & Clear reads: "When you combine the growth of the overall royalty pool paid out to rights holders — and the expanding number of artists succeeding thanks to streaming — we believe the future is incredibly bright for artists’ careers." 

  Here is a selection of the data presented on the site:

  > Spotify had paid over €21 billion ($23bn) in royalties to music rights holders since its launch in 2006.

  > Spotify has paid rights holders €5 billion in 2020.

  > Spotify offers 70 million tracks for streaming.

  > Over 60,000 tracks are uploaded to Spotify every day, which translates into 50,000 hours of content uploaded daily.

  > The service features 4.5 billion playlists.

  > There are 2 million podcasts available on Spotify.

  > Some 8 million creators have content featured on the platform, and Spotify forecasts that there will be 50 million creators by 2025.

  > In 2020, 13,400 acts generated total payments in excess of $50,000 around the world, up from 7,300 in 2017.  

  > In 2020, 7,800 artists generated over $100,000 in payments.

  > In 2020, 1,820 artists generated over $500,000 in payments.

  > In 2020, 870 artists generated over $1 million in payments. 

  > 551,000 tracks have clocked over one million streams of which 207,000 songs passed that mark in 2020 alone.

  > Over a hundred songs have reached a billion streams.

  > 57,000 artists represent 90% of monthly streams on Spotify — a number that has quadrupled in just six years.

  > 2,710,000 tracks have over 100,000 streams.