Musicians are speaking out against Spotify

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In December 2024, Spotify unveiled their Q4 report for the year, boasting that they had paid a staggering $10 billion to the music industry in 2024, bringing their total payout since establishment to a colossal $60 billion. On their official website, Daniel Ek, Spotify’s Founder and CEO, revealed a 16% increase in quarterly revenue, resulting in an annual earnings of €4.22 billion, which is approximately $4.613 billion.

The number of their annual paying subscribers rose to 263 million individuals, while their monthly listener base expanded to 675 million people. Moreover, they assert that for the first time in its history, Spotify recorded a net profit in the year 2024. Hooray!

If Spotify experienced a successful 2024, posting its first-ever net profit and distributing an unprecedented $10 billion to the music industry, one might expect widespread enthusiasm. Yet, it seems that many shareholders, artists, and even working musicians are not overly enthused. One might wonder why the champagne bottles aren’t popping, given these impressive figures. Could it be that the average musician still questions Spotify’s financial transparency and wonders aloud, “Where’s my cut of the pie?

Where is the Spotify money really going?

As a gamer, diving into financials feels more like a grindy side-quest than an exciting level-up. Yet, I took on the challenge, only to find it as monotonous as ever. It didn’t exactly unveil any hidden secrets or mind-blowing revelations; it was pretty much what I had anticipated. There wasn’t a hint of anything sneaky or brewed in the shadowy corners of dark magic. Spotify appears to be quite transparent about its earnings and expenses.

To put it simply, despite the fact that Spotify’s quarterly reports are designed with a lively and creative Canva-style layout that resembles a party invitation, it’s safe to say that only a small fraction of people, roughly 3%, will actually take the time to read them. This certainly does not include musicians.

To vocally demand that they reveal the financial details (or for fans to shout “Show ’em the dough”), it’s beneficial for everyone passionate about contemporary music to grasp how this system works and what Spotify specifically does. In my view, Spotify isn’t malicious, but it’s not particularly artist-friendly and shouldn’t present itself as such.

To put it simply, artists are expressing frustration and confusion over insufficient royalty payments they receive from Spotify. Essentially, they’re taking issue with the powers that control the platform. Given the abundance of alternative streaming services, it’s Spotify that finds itself under scrutiny at the moment. This article aims to delve into the workings of Spotify’s systems and algorithms, a topic currently generating much interest.

It’s possible that this is due to Spotify stating they return more money to artists than any other streaming platform, positioning themselves as leading champions in the industry. As stated by Daniel Ek in his Q4 report, “Spotify delivers creativity to the world.” Essentially, Spotify presents itself as an essential player in preserving music, a claim that might be seen as rather confident.

Spotify is not evil, but it certainly is not artist friendly

There’s a growing sense of dissatisfaction among musicians and record producers in the industry today, and it’s becoming more and more apparent. This frustration is raw and tangible, and Spotify is being singled out. The call to action is getting louder, with people wanting to scrutinize Spotify even further. But who exactly deserves this intense scrutiny? We’ll have the answer by the end of this article. Let’s see how this unfolds.

The general consensus seems to be that the royalties from Spotify are rather excessive and require significant adjustments. To put it delicately, the payment system used by Spotify appears quite peculiar, yet many artists and listeners remain unaware of its intricacies. Let’s shed some light on this topic (using a metaphorical garden as an analogy): The royalty distribution from Spotify can be likened to a beautiful, lush garden that seems abundant with flowers, but when you look closer, you realize that only a few plants are receiving all the nourishment and water, while many others are left parched. This highlights the need for a more equitable distribution system within this digital ‘garden’ of music.

At the close of each day, music enthusiasts find great joy in repeatedly listening to their favorite tunes. Moreover, they derive satisfaction from feeling connected to the artists they admire, believing that their support allows these musicians to continue creating music that brings them even greater pleasure.

In reality, Spotify’s payment system is structured so that, even though we’re listening to and backing our favorite artists, we might be unknowingly aiding artists we don’t listen to. However, if you happen to adore only the top 10 global artists, then there’s no need to feel awkward about this situation.

The majority of the following details are primarily sourced from a captivating video shared by Tony Van Veen, CEO of Disk Makers, in February 2025. This information comes mainly from Nielsen, a renowned world leader in audience measurement, data, and analytics across all media formats. Additionally, this data is supported by almost any other online article or video you might encounter.

What you might find intriguing is that the payment structure for artists on Spotify doesn’t involve a flat rate per stream. Instead, artists receive some remuneration based on an average value that Spotify assigns to a stream, which is influenced by numerous, often unquantifiable factors.

The primary factor among these elements is undeniably Spotify’s annual income, which is determined by the count of subscribers, the amount they pay for their subscriptions, and their geographical location where they maintain their subscriptions. Essentially, royalties earned per song typically hover around 0.002 to 0.003 dollars per stream. Quite a low figure, indeed.

Spotify says no song that has less than 1,000 streams will receive any royalty payment

Few people may be aware of this (especially musicians), but Spotify declared in November 2023 that it won’t distribute royalties for any song streamed fewer than 1,000 times. This means out of the staggering 202.2 million songs available on Spotify right now, those with less than 1,000 streams will receive no royalty payments at all.

To clarify, it’s not accurate to assume that most artists are receiving at least 1,000 streams on Spotify. In fact, the opposite is true for a large majority of songs available: approximately 87% of the total 175.5 million tracks have fewer than 1,000 streams.

Approximately 175 million songs on Spotify are currently generating no income for their creators, which equates to absolutely nothing in monetary terms. The artists who composed those tunes aren’t receiving any compensation for their efforts. Out of the $10 billion that Spotify claims to distribute to the music industry, only 13% goes towards paying royalties for the songs available on the platform. This arrangement appears rather skewed in favor of a small portion of artists.

But don’t think that Spotify is actually keeping that money. It’s not. Spotify has a heart. Right?

175.5 million songs on Spotify, even though they are rarely played, continue to generate royalties. By legal requirement, this revenue must be distributed. However, it’s important to note that the $46.9 million in royalty earnings from these 175.5 million tracks doesn’t go to the creators whose songs make up the 87% share of Spotify’s total offerings.

Instead of sending millions of small payments to artists worldwide, Spotify is consolidating the money, using it to determine the value of each stream through an algorithm. This valuation is then distributed back to artists whose songs are among the top 13% most-streamed tracks on the platform (songs that have been played more than 1,000 times).

Out of the over 200 million songs available for streaming on Spotify, a mere 26 million have earned royalties for artists. This figure becomes more divided when considering the entire history of music streaming on Spotify (not just in 2024 but since any song was uploaded). Here are the breakdowns:

OR

Around 1 out of every 8 songs streamed on Spotify doesn’t generate any royalties for artists. This ratio remains consistent when looking at the entire history of music streaming on Spotify, not just in the current year.

  • 175.5 million songs are streamed fewer than 1,000 times.  ($0 payout)
  • 24 million songs are streamed from 1,000 – 100,000 times. ($3 – $300 payout)
  • 2.1 million songs are streamed from 100,000 – 1 million times. ($300 – $3,000 payout)
  • 492,000 songs are streamed from 1 million – 1 billion times. ($3,000 – $3,000,000 payout)
  • 296 songs are streamed more than 1 billion times.  (yay for them)

To be classified as an “official stream,” a song must play continuously for more than thirty seconds by a distinct listener. It’s also important to note that if the song ceases being played repeatedly, both earnings and royalty payments to the artist will come to an end.

A significant number of the 296 tracks are from artists who consistently top the Billboard charts, such as Taylor Swift, Bad Bunny, The Weeknd, Drake, Billie Eilish, Benson Boone, and Sabrina Carpenter. This is mainly due to their powerful promotional teams at their record labels, who have vast resources at their disposal for promoting their music and driving streams.

It’s not that I believe these artists don’t merit being streamed so frequently. On the contrary, they are all exceptionally talented musicians with captivating tunes, and they have put in an enormous amount of effort to reach this significant milestone. What’s more, some of them even perform incredible feats like front flips on stage during a song, which is truly breathtaking.

However, while giant pop icons continue to thrive through various income channels like concerts, airplay, merchandise sales, and synchronization, most artists whose music is in the 87% unclaimed on streaming platforms such as Spotify struggle financially.

Beyond everything else, Spotify’s algorithms play a crucial role in deciding which songs become popular by featuring them on different Spotify-curated playlists. Unfortunately, this means that the majority of songs (87%) will struggle to be heard more than 1,000 times, making it extremely challenging for their creators to earn enough money from their work – not even enough for a simple Happy Meal purchase.

You’re mistaken,” you assert. I have my doubts about that, but let me explain. As a songwriter with a significant presence on Spotify (with around 87% of my work), I understand your perspective. However, we find ourselves in the aftermath of Napster, and for the most part, we can’t return to the past. Streaming platforms like Spotify are currently the primary means by which music is shared and discovered.

However, it’s essential to acknowledge that large music streaming services like Spotify, Apple Music, and Amazon Music largely thrive by leveraging the works of less-known independent artists to establish their extensive libraries, which in turn helps them generate higher profits.

Indeed, they will ultimately distribute that sum of money, although it may not be directed towards the artists whose careers they’ve been nurturing. It appears somewhat biased, and it’s not uncommon for the music industry to show such imbalance. After all, fairness towards all artists has never been a hallmark of the record industry.

Corporations like Spotify will continue building their empires by freely using material someone else creates

It might be unnecessary to get upset solely at Spotify. Is their policy of not compensating artists until they surpass 1,000 streams per song unfair? Yes, it is. It’s crucial to hold large music streaming platforms like Spotify accountable for fair payment standards, as the gap between what artists receive and what they deserve could become excessive. So, where do you need to go to address this issue…? That would be advocacy or contacting them directly.

Music-streaming platforms are legally obligated to compensate artists, yet the specific amount they should pay is determined by Congress. To ensure artists receive fairer compensation, it’s essential to understand how Spotify and similar services organize their payment structures. By advocating for these companies to be mandated to distribute more equitable payments, we can potentially improve artist earnings, as the current system is widely considered inadequate.

It appears that we’re facing a situation where change in Congress seems challenging. In such a case, as supporters and enthusiasts, it’s crucial for us to brainstorm innovative strategies to funnel funds directly to the artists we admire.

In today’s world, artists find themselves in a position where they must accept the reality: streaming platforms primarily serve as avenues for exposure and discovery. They should not harbor hopes of earning a substantial income from streaming royalties, as this is not a viable long-term solution. This will never change, it’s an eternal truth.

Large companies such as Spotify and others yet to emerge will expand their domains by utilizing content created by others, with the assurance that their work might potentially reach an audience of 675 million individuals worldwide. However, it’s important to note that statistically, fewer than 1,000 people are likely to actually listen to the work. In essence, these corporations profit from this dynamic.

A living wage doesn’t originate from digital sources alone; it emerges from the passionate supporters, or fans, as you might be one of them reading up to here in this rather formal text.

Absolutely, enjoy your favorite tunes on Spotify, don’t forget to “like” and save songs into a playlist too. Then, explore the merchandise section of your preferred artist’s official store and consider purchasing a cool t-shirt, mug, or cap. One of the perks I appreciate about Spotify is that it connects you directly to an artist’s merch store from their profile page.

One single online hoodie sale could potentially earn me more than if my song is streamed 10,000 times by 10,000 unique listeners. If you’re looking to make a significant impact, consider supporting an artist who you believe has talent and potential, and help them cover the expenses of producing vinyl records for selling at live shows.

How about this instead? Attend their concerts and show them your enthusiasm! Cheer them on passionately as they pour their hearts into their live performances. If you feel up to it, take action by contacting Congress through the website my friend who wrote the Paw Patrol theme song (yes, he too sees a need for change) provided.

Hey fellow gamers and music enthusiasts! If you’ve got some fresh thoughts on this topic, I’d be thrilled to hear them in the comments below. Many other musicians and songwriters, who are no doubt finding this insightful piece as fascinating as I am, would appreciate your insights too!

Despite what Ek claims in Spotify’s 2024 Q4 report, it is actually the artists who bring creativity to the world, not Spotify itself. Mr. Daniel Ek, CEO of Spotify, please acknowledge this and credit the artists accordingly.

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2025-03-22 20:01