Spotify Gets Loud & Clear, Says It’s “Largest Single Contributor To Australian Music Industry”

Spotify has released its annual Loud & Clear report, breaking down the platform’s usage and revenue trends over the course of 2022. 

The report (available here) found that Australian Spotify users have a massive impact on the current state of the music industry; in a media presentation hosted by the company, it claimed that “Spotify is the largest single contributor to the Australian music industry”, citing $250million in royalties paid out in 2022 – a 75 percent growth from the same data reported in 2018, and five times the growth of the Australian music industry’s revenue as a whole.

“This figure represents revenue generated from Spotify alone,” the Spotlight On Australia section of the Loud & Clear report notes, “and does not take into account earnings from other services and recorded revenue streams, concert tickets or merch.” According to the report, other revenue steams in the industry have grown by an average of 14.2 percent since 2018. 

It was also brought up in the aforementioned presentation that 70 percent of the revenue generated was paid out to rights holders. More broadly, the platform has seen a 75 percent growth in revenue generated from streams by non-Australian listeners. 

As tweeted by Spotify’s founder/CEO Daniel Ek, too, roughly 80 percent of the royalties earned by Australian artists in 2022 came at the hands of users from abroad. As a whole, Spotify reached more than 515 million listers across 184 international markets.

Markets like Australia are experiencing explosive growth in music streaming revenues. More artists are breaking down geographical barriers and making their local fans proud, while also being discovered by new listeners worldwide.🚀🇦🇺 pic.twitter.com/B6ib1OtJ0V

— Daniel Ek (@eldsjal) June 6, 2023

Sifting through the data collected, Spotify shared a list of its ten biggest “global takeaways” from the 2023 Loud & Clear report. For starters, the company claimed that all-time payouts made to music rights holders continued to grow over 2022, nearing $40 billion in total. 

As claimed by a document breaking down the biggest points: “Every year, Spotify has paid out more and more money in streaming royalties, resulting in record revenues and growth for rights holders on behalf of artists and songwriters. These rights holders include record labels, publishers, independent distributors, performance rights organizations and collecting societies.”

You can see the remaining nine of Spotify’s “global takeaways” from the 2023 Loud & Clear report below. 

2. Spotify pays out nearly 70 [percent] of every dollar we generate from music back to the industry.
Spotify generates music revenue from two sources: subscription fees from Premium listeners and fees from advertisers on music on the Free tier.

Nearly 70 [percent] of that revenue is paid back as royalties to rights holders, who then pay the artists and songwriters, based on the agreed terms. These rights holders include record labels, publishers, independent distributors, performance rights organizations and collecting societies. Spotify does not pay artists or songwriters directly. 

3. The number of artists generating $1 million+, as well as those generating $10,000+, has more than doubled over the past five years.
Spotify royalties are powering artists’ careers at all stages. In 2022, 57,000 artists generated $10,000+ (up from 23,400 in 2017). And 1,060 artists generated $1 million+ (up from 460 in 2017).

These figures represent revenue generated from Spotify alone. When taking into account earnings from other services and recorded revenue streams, these artists likely generated 4x this revenue from recorded music sources overall, plus additional revenue from concert tickets and merch. 

4. For the first year ever, 10,000+ artists generated $100,000+ on Spotify alone across 100+ different countries.
In 2022, for the very first time, 10,100 artists generated at least $100,000 on Spotify alone. That’s up from 4,300 artists five years ago.

What’s more, these artists hail from more than 100 different countries around the world. Streaming has lowered barriers to entry. Artists who – in the past – might have struggled for opportunities are now finding their audiences. 

5. The 50,000th highest-earning artist generated $12,500+ from Spotify alone – and likely $50,000 across all recorded revenue sources.
In 2017, the 50,000th highest-earning artist generated $2,840 on Spotify. In 2022, that figure was 4x as much: $12,584. 

Spotify and streaming are driving a healthier, more diverse music industry than ever before. As a point of comparison, a radio station typically plays a rotation of the Top 40 songs, while even the largest record store in the heyday of physical record sales carried the music of a few thousand artists. 

6. Spotify paid out more than $3 billion to publishing rights holders over the last two years.
Songwriters and producers – through their publishing rights holders – are generating record-breaking revenues, driven by streaming services. Over the last two years, Spotify has paid out more than  $3 billion to publishers, performance rights organizations and collecting societies that represent songwriters. 

7. There are around 200,000 professional or professionally aspiring recording acts globally on Spotify, and they generated 95 [percent] of the total royalties in 2022.
We’re proud to enable millions of artists to reach millions of listeners around the world. Some are looking to build a career, while others may treat music as a hobby. 

Based on Spotify data and external data from our ticketing partners, we estimate there are around 200,000 professional or professionally aspiring artists. Those artists generated 95 [percent] of the total royalty pool on Spotify, while contributing 15 [percent] of all tracks uploaded daily to Spotify. 

While many often cite the nine million people who have uploaded any music to Spotify, when it comes to building financial opportunities, we’re focused on these 200,000 professional and professionally aspiring artists. 

8. Over a quarter of all artists who generated over $10,000 self-distribute to Spotify.
Many artists use distributors like DistroKid, TuneCore, CD Baby or others to self-release their music on Spotify – and for more than ever before, it paid off. A quarter of artists who reached $10,000 in earnings on Spotify released music through an artist distributor in 2022. These 14,700+ artists represent a 200 [percent] increase since 2017 

9. Nearly 35 [percent] of the artists who generated more than $10,000 on Spotify live in countries outside the top ten music markets.
Streaming has fundamentally changed the music ecosystem – lowering barriers to entry and democratising access to music for listeners everywhere. Artists no longer need big budgets to create, distribute and amplify their music around the world. 

Spotify is now available in 184 markets, helping these artists reach new fans. Of the 57,000 artists who generated more than $10,000 on Spotify in 2022, nearly 20,000 live in countries outside the IFPI’s top ten music markets (Australia, Canada, China, Italy, France, Germany, Japan, South Korea, the UK and the US). 

10. In 2022, nearly 3,000 catalogue-heavy artists generated more than $100,000 on Spotify alone.
There are nearly 3,000 Heritage artists on Spotify – those with over 80 [percent] of their streams coming from tracks over five years old – generating significant passive income on their catalogues. 

While in the CD era the bulk of revenues were generated during release week, streaming has fundamentally changed the earning lifespan of music, powering historic acquisition values of many catalogues.