Spotify has disclosed paying out a record $10 billion in royalties during 2024. Photo Credit: Spotify
Just moments after a report indicated that Apple Music pays far better, Spotify is touting the record $10 billion it paid out to the music industry in 2024 – and eyeing a goal of one billion paid subscribers across all on-demand services. But does the royalties figure tell the entire streaming-compensation story?
David Kaefer, currently VP of Spotify’s music and audiobook businesses, broke down his company’s 2024 payout milestone in a blog post today. Unsurprisingly, the nearly seven-year Spotify exec emphasized the sum’s size relative to the entire recorded music market ($13 billion, with a $1 billion or so contribution from Spotify) a decade ago.
The former Microsoft higher-up also stressed Spotify’s almost $60 billion cumulative industry payout and pointed to the “well over” 10,000 artists who generated north of $100,000 from on-platform plays last year. In 2014, Kaefer communicated, approximately the same number of acts made a noticeably smaller $10,000 apiece.
While there’s certainly something to be said for those findings – and for overall growth at Spotify, which topped yet another all-time-high stock price in early trading – it’s worth noting that close to 70% of audio uploads failed to crack 100 streams apiece across all platforms in 2024, per Luminate.
Furthermore, in light of the 1,000-stream minimum Spotify implemented at the behest of the majors, the lion’s share of works couldn’t have earned any on-platform recording royalties last year.
Additionally, as the AI music floodgates are wide open, more machine-made audio than ever is claiming streaming space and royalties. This isn’t a Spotify-specific problem; in fact, the service looks to be comparatively adept at halting AI streaming fraud.
But between the AI audio tidal wave and the majors’ inherent promotional edge on streaming services – referring to contractually guaranteed playlist spots and a whole lot else – it’s harder than ever for indies to stand out, attract listeners, and generate royalties on Spotify.
Absent as well from the blog entry is any mention of Spotify’s bundling-fueled royalties recalibration on the compositional side. As covered by DMN in detail, the savings-minded service last year began classifying the vast majority of its plans as bundles in the States, thereby paying considerably less to songwriters and publishers.
(Under a wider Spotify pact, Universal Music Group has now opted for a first-of-its-kind direct deal on the publishing side; non-UMPG publishers are said to still be receiving the same payments, but that could change in the not-so-distant future.)
As to where things go from here, Kaefer concluded by reiterating the above-highlighted goal of hitting “1 billion paid subscribers across all streaming services.”
The text likewise references a one billion paid “listeners” objective, which, owing to multi-user plans, isn’t quite the same thing as one billion subscribers.
In any event, particularly given subscription listening’s ongoing growth in emerging markets, that objective doesn’t appear to be too far off. Spotify reported an average of 252 million subscribers for Q3 2024, for instance, with Tencent Music-owned services contributing another 119 million paid users to the total for the same period.
And per DMN Pro data, Apple Music, Amazon Music, and YouTube boast over 50 million cumulative Individual subscriptions in the U.S. alone – a figure that jumps when also considering multi-user Family plans and different markets.