Spotify has paid out a record-breaking £7.7bn in royalties to the music industry, sparking debate over fair compensation for artists and songwriters.
Spotify has paid out a record-breaking £7.7bn in royalties to the music industry in 2024, according to the company’s latest figures. This represents the highest annual payment from any single retailer in history.
Spotify is a Swedish music streaming service founded in 2006 by Daniel Ek and Martin Lorentzon.
It offers users access to over 50 million tracks, including popular songs, albums, playlists, and podcasts.
The platform has revolutionized the way people consume music, with features like Discover Weekly, Release Radar, and Daily Mix.
In 'we're essentially building a recommendation engine that's personal to every individual user' , Daniel Ek said in an interview.
In 2018, Spotify went public on the New York Stock Exchange (NYSE), making it one of the largest publicly traded companies in the world.
Today, Spotify has over 400 million monthly active users worldwide.
The significant increase in payments comes as a heated debate continues over how much money artists and songwriters receive in royalties. Several Grammy-nominated songwriters boycotted an awards event hosted by Spotify earlier this year due to their concerns about streaming earnings.
Spotify’s spokesperson has stated that the responsibility for distributing the money it pays lies with record labels and publishers, rather than the company itself. The company pays royalties to rights holders, which are typically record labels, music publishers, and collection societies. These rights-holders then pay artists and songwriters based on their individual agreements.
The amount of money earned by artists varies greatly, but a committee of MPs heard in 2021 estimated that performers ultimately earn around 16% of a stream’s overall value. This means that an artist whose music generates £100,000 on Spotify might only receive £16,000 in royalty payments before tax.
While Spotify is not the only streaming service to generate revenue for artists, many pop stars make more money from other income streams such as live tours. The company has stated that it does not pay on a per-stream basis and that more than two-thirds of all music revenue goes ‘straight to the recording and publishing rights-holders’.
The annual figures were published in Spotify’s Loud and Clear report, which aims to provide transparency on how the company pays the music industry. The report highlights that the number of artists generating annual royalties between $1,000 (£770) and $10m has tripled since 2017.
Taylor Swift was named Spotify’s top artist globally with over 26 billion streams in 2024, in the year she released her double-length album The Tortured Poets Department: The Anthology. Swift herself has been a vocal advocate for artists’ rights, having removed her music from Spotify as part of a boycott in 2014 before re-joining the platform in 2017.
Taylor Swift is a multi-platinum, award-winning American singer-songwriter and pop culture phenomenon.
Born on December 13, 1989, in Reading, Pennsylvania, Swift began her music career at age 16.
She has since released eight studio albums, including 'Fearless,' '1989,' and 'Folklore.' With over 100 million records sold worldwide, 'she is one of the best-selling artists of all time.'
She has won numerous awards, including 10 Grammy Awards, and has been named one of Time Magazine's 100 most influential people in the world.
Despite the significant increase in payments, dissatisfaction over streaming royalties continues. A large-scale survey of musicians in Europe found that about 70% were unhappy with the amount they were paid in streaming revenue last year.
