Analysing Spotify's payouts for 'emerging and professional' artists

Hopefully you’ve already seen our overnight story about the latest update to Spotify’s ‘Loud & Clear’ website (if not, you can read it here).

One extra titbit from the website focuses on Spotify’s definition of ’emerging and professional artists’ – that’s musicians who are actively trying to make a living from their work.

It reckons there are now 225,000 of them on its platform, up from 200,000 a couple of years ago. The extra bit is outlined in the site’s FAQ section.

“Based on this estimate, you could calculate that more than a quarter (29%) of professional or professionally aspiring artists generated $10,000 in 2023 from Spotify alone (and likely over $40,000 across all recorded revenue sources),” claimed the company.

That’s based on Spotify’s data showing that 66,000 artists generated more than $10k of payouts last year.

Using similar logic, we can calculate that just under 46% of those emerging and professional artists generated more than $5k of Spotify payouts last year (so possibly $20k across all recorded revenue sources) – because there were 103,400 in this category.

The obvious question, then, is how many artists who are trying to make a living from their music are actually doing so? Spotify’s own numbers suggest that 71% of this cohort are generating less than $40k across all recorded revenue sources a year.

That’s before any rightsholder cuts and (for groups) splits between multiple members, although it also doesn’t include live earnings, merch sales, and other music-related income (from session work to teaching to the rest of the patchwork of jobs modern musicians often piece together to pay the bills).

Spotify’s argument, which it reiterates on the site, is that this is why this year’s changes to its model – cracking down harder on fraud, paying less for ‘non-music noise’ content, and only paying royalties to tracks that have reached more than 1k streams in the last year – are important.

The company has estimated that these changes will funnel more than $1bn towards the emerging and professional artists over the next five years. Plus it has been increasing the visibility of artists’ tickets and merch within its service to juice some of those non-streaming revenues for musicians.

So, our analysis is less a criticism of Spotify specifically, and more a reminder of the realities of the modern music economy. Even when you strip out the hobbyists, the inactive artists, the noise content, the AI-generated tracks and (hopefully!) the fraudsters, only 29% of the ‘serious’ artists left are making more than $40k a year from their recordings.

‘Loud & Clear’ does offer some optimism: for example its finding that nearly half of the 23,400 artists who generated $10k of Spotify payouts in 2017 generated more than $50k in 2023.

But still. Spotify CEO Daniel Ek once said his company’s long-term mission was “helping one million artists to be able to live off their art“. With only 259,700 generating more than $1k of payouts from the service last year, there is clearly still a long road to that goal.

For more on Loud & Clear, listen to this interview (Spotify / Apple Podcasts / Amazon Music) with Spotify’s Sam Duboff on industry podcast The Price of Music, hosted by our own head of insight Stuart Dredge.