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The launch of Napster in 1999, the launch of the iTunes music store in 2003, and the debut of YouTube in 2005 are notable milestones. But progress often comes as a series of small steps forward.
One such small step is Spotify’s Loud & Clear. This is an annual report that provides some transparency into the amount of royalties the company pays each year. Volume 3 of the Loud & Clear report was released on his March 8th, coinciding with Spotify’s live streaming media event, Stream On.
Loud & Clear conveniently displays artist royalties in context. Every artist knows how much she earns on her streaming platform. But Loud & Clear teaches artists what makes them different from other artists. Making $100,000 a year in royalties is one thing for him, but knowing how many other artists make at least $100,000 for him is another.
“I think it is very important for the ecosystem to understand the shape and magnitude of the outcomes of the different participants. You will be able to understand what you are doing.” Charlie HellmanSpotify vp, Global Head of Music Products.
And how evolved is the ecosystem? Spotify wants to give “one million creators the opportunity to make a living from their art.” This could include both musicians and podcasters. That goal dates back to the CEO’s statement. Daniel Investor Day 2017. At the time, Spotify counted 22,000 artists as “top-notch” earners (but didn’t say exactly how much they earned). Today, thanks to Loud & Clear, we probably know that his million creators don’t make a living from their art. But as Spotify, and streaming in general, grows in popularity, the number of artists earning sustainable sums, as you define it, is slowly increasing.
For the third year in a row, there are 27,000 established artists who have been defined as Spotify’s top 50,000 artists, but who have been defined as outside the top 500. But they are far from enthusiasts. They are also likely signed to record labels and receive only a fraction of those royalties.
In 2022, there were nearly 3,000 “catalog-centric” artists earning $100,000 or more on Spotify. These artists got over 80% of his streams from tracks that were over 5 years old. Given that Spotify estimates that other streaming sources account for 75% of the artist’s revenue, these artists are believed to be earning around $400,000 a year in streaming royalties.
If streaming is to make a living for many musicians, the economy needs to work for the independent musicians who make up the bulk of the working class. In 2022, a quarter of his 57,000 artists who earned more than his $10,000 in royalties from Spotify in 2022 are self-distributing through DistroKid, TuneCore, CD Baby, and more. This equates to his nearly 15,000 artists, a 200% increase for him since 2017. That’s a far cry from a million. But as his streaming platform continues to grow, so will the number of self-distributed artists making that amount of money.
Streaming platforms increasingly facilitate other parts of an artist’s career, such as ticket sales and merchandising. Spotify lists some product sales by third-party providers such as Shoptify and Merchbar. While not including Loud & Clear merchandise sales, Hellman said: We didn’t do it this year, but it’s a big strategic focus for us. ”
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