Spotify’s mission statement is preposterous. Here’s why.

MBW Reacts is a series of comments from the Music Business Worldwide team. These are our analytical (and sometimes dogmatic) reactions to recent major entertainment news stories.

“Our mission is to unleash the potential of human creativity by providing one million creative artists the opportunity to make a living from art and billions of fans the opportunity to enjoy and be inspired by art. It’s about liberating your sexuality.”

This has been Spotify’s mission statement in our annual financial reports for the past five years.

I pointed out earlier that it was just a fantasy. But Spotify’s latest declaration makes the point very clear.

Last week, Spotify became an annual stream on event, at the same time providing its annual update Loud & Clear Platform – A repository of information about how much Spotify pays royalties and to whom.

In Spotify’s words, Loud & Clear It exists for one, among other things:[To] It provides a valuable foundation for constructive conversations. ”

So it’s not the loud & clear surface level data, it’s the data collected by Spotify. hope This will be the most “constructive conversation” about the music industry and its direction.

To get to the good stuff, you have to dig a little deeper than that.

Here are two important examples of recent surface level data: Loud & Clear update:

1. Spotify says it 57,000 created by the artist $10,000 More on the platform in 2022 (recorded music and publishing royalties total).
2. it also says 1,060 created by the artist $ 1,000,000 on that platform in the same 12 months.

Taken at face value, these figures show that the base of artists who are well paid by the world’s largest subscription streaming platform continues to grow.

Spotify clearly likes that story a lot.that’s right Loud & Clear The site notes, “In today’s thriving music economy, more artists share than at the peak of the CD age.”

This means that any unreliable analysis of these numbers should take into account how they have changed over time.

And as we start down this path, these numbers begin to take on a different character. It faces Spotify’s wonderfully serious, yet hilariously silly mission statement.

take a closer look at the facts

Let’s zoom in.

Loud & Clearshowing, in stunning level of detail, how many artists generated annual royalties (across records and publications) across various financial thresholds in 2022.

These thresholds include $10,000 and above, $50,000 and above, $100,000 and above, $500,000 and above, and $1 million and above.

Below is this information Loud & Clear The site itself:

Never Forget: When Spotify Says 57,000 artists generate more than $10,000 For the 2022 platform, that number is a compilation of various acts. $10,001 All the way down to the handful of artists who made millions of dollars on the platform last year.

Therefore, to get a more detailed understanding, we need to break down the numbers even further. Loud & Clear See how many artists are making their own money Individual Loyalty Bracket on Spotify.

Below, MBW does just that. Loud & Clear Information for the last three years (2022, 2021, 2020).

now. The interesting thing about his three donuts above isn’t just the beautiful colors. YoY change Between the data they present.

In particular, year-on-year differences between richer annual categories ($50,000 or more) in 2021 and 2022.

Fear not. No need to scroll up and do the math in your head. Instead, here are some visuals that bring it all together.

What stands out in the chart above is the dramatic reduction in annual growth in the number of artists listed above. $50,000 A year at Spotify in 2022 vs. 2021.

Overall, this group of artists (that is, the $50,000+ category combined): 17,800 2022 – increased by 1,300 in the previous year.

However, in 2021, the same category will increase year-on-year 3,100… is more than double Growth rate in 2022.

Things get tougher the higher you go in the revenue category.

For example, in 2022, “Over $100,000” the category is 600 Artist YoY. In 2021, the comparable numbers are nearly three times larger. 1,700.

Digging deeper: In 2022, the “$100,000 to $499,000” category will 540 Artist YoY… In 2021, the year-on-year growth is 1,330.

Conclusion?

The annual growth rate of the volume of “creative artists” who can “make a living from art” on Spotify is deceleration – no Growing.

At this stage, let’s revisit Spotify’s (ongoing) mission statement.[T]o Unlocking human creative potential by giving 1 million creative artists the chance to make a living from their art. ”

For Spotify to give these creative artists their “opportunity” individually, each act must be at least $50,000 1 year on the platform.

(Note that whatever these actions “produce”, after paying the distributor/publication management company/publisher/record company fees, commissions, collection fees, etc., their royalties will necessarily be reduced.) Please remember.)

As mentioned above, in 2022 17,800 artists generate $50,000 or more on Spotify.their number that year 1,300.

With such an annual growth rate, how long will it take Spotify to reach its goal of 1 million creative artists…living on their art?

oh look another one 755.

Ridiculous.global music business