MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.
Yesterday (March 18), MBW reported that 13,400 artists generated over $50,000 each in royalty payouts (records plus publishing) from Spotify in 2020.
That 13,400 figure – revealed on Spotify’s new Loud & Clear website – was nearly double the equivalent number seen in 2017.
If you extrapolate along the same growth trajectory, we can likely expect to see around 25,000 artists generating $50k annually from Spotify by 2023… and nearly 50,000 artists hitting the milestone in five years’ time (2026).
Over on the bouncy castle of intellect, calm and enlightenment that is Twitter, the reaction to this story was… a big squealing tantrum.
Within minutes, furious tweets abounded, with MBW itself accused of being a “credulous” mouthpiece for Spotify’s misinformation.
As any of our regular readers will know, we’re bang to rights here. Whether it’s hammering Spotify for its appeal against a songwriter pay rise in the US; warning artists against Spotify’s fixation on podcast investment; deep-diving into Spotify’s annual losses; hosting Spotify’s ex-head of Publishing telling the world why it should be paying creators more money; exposing Spotify’s quiet deletion of its dumb ‘Secret Genius’ fig-leaf; revealing Spotify’s plans to use AI tech to read and manipulate your emotions; outright scolding Spotify for the scandalous ‘fake artists’ filling its mood playlists (for which we literally got into a public spat with the company); providing a megaphone for those calling on Spotify to overhaul its payout system; or relentlessly monitoring the worrying slide of Spotify’s ARPU numbers right through the floor… well, we’re unquestionably suckling at the teat of Daniel Ek‘s corporate comms daily. Obvs.
The more pertinent criticism hurled at our headline (‘How many artists are generating $50k+ on Spotify? Over 13,000’) contained variations on this kind of thing: “Only 13k out of 1.2 f***ing million.”
MBW’S STAT OF THE WEEK: An estimated 0.2% of artists with music on Spotify are generating over $50k in royalty payouts per year on the platform. That’s around five times the likelihood of association-level footballers making it to being paid something as a professional.
Before we get into the granular data, let’s first correct the math. Because if you’re of the mindset that Spotify is screwing artists, the real numbers are actually much worse.
Last month, Daniel Ek revealed that there are now over 8 million creators with work available on the Spotify platform.
As we pointed out at the time, his use of the word “creators” here deliberately covered both podcasters and recording artists. But going off Spotify’s public numbers for its podcasts, MBW confidently estimated there are now somewhere around 7 million artists with their music on Spotify.
So: 13,400 artists generating over $50k a year out of 7 million total acts. This means just 0.2% of artists on Spotify are generating $50k per year (a figure which is roughly equivalent to the median annual US wage).
But how bad (or otherwise) is this 0.2% figure in reality?
Kicking around the numbers
Here’s a fun data point. According to a global FIFA Big Count survey, there were 265 million people playing association-level soccer (football) around the globe in 2006, a number that had climbed by 23 million people over the prior six years.
It’s therefore fair to assume that today, 15 years on, there’s more like 320 million association players worldwide.
We’re not talking about kickabout-in-the park footballers (which would be a far higher number): we’re talking association-recognized footballers playing the game to a level that requires referees, corner flags, goals, nets… and supportive spouses stood fatigued on the touchline, with better things to be doing.
Do you know how many footballers / soccer players around the globe play to a professional – as in, actually getting paid anything for it – level?
According to a 2019 FIFA survey, it’s 128,983, across 187 countries. (The nation with the most professionals is Mexico, followed by Brazil, and then England.)
See where we’re headed?
To recap: we have one FIFA survey suggesting around 320 million people have the right to self-identify as “footballers” today.
And we have 128,983 people actually getting paid (something) to be professional footballers worldwide.
This therefore puts your average footballer’s chances of being paid (something) for the vocation they love and enjoy at approximately 0.04%.
That’s a fraction (around 1/5) of the chance (0.2%) that an artist has of generating $50k or more per year on Spotify today.
And a tiny fraction (around 1/15th) of the chance (0.6%) that an artist has of generating $10k or more a year on Spotify today.
Reality? Is that you?
The fact is, just like telling people you’re a “footballer”, self-identifying as a “recording artist” today requires no barrier to entry (other than some free software and a TuneCore account).
It doesn’t automatically mean you’ll ever amount to any more than a hobbyist – no matter how aggrieved you may be about that fact – and it certainly doesn’t mean your music deserves to generate anywhere near $50k on Spotify in a given year.
What’s definitely true is that streaming has made attaining a “professional” level of revenue from recorded music a more competitive pursuit than ever before. The fact that a new track hits Spotify near enough every second of the day tells you all you need to know.
An artist might feel a major popularity milestone has been hit, for example, when they surpass 1,000 monthly listeners on Spotify. Loud & Clear shows us that 1.2 million artists are there already.
An artist might also, understandably, feel a major popularity achievement has been racked up with 100,000 monthly listeners on Spotify. Loud & Clear shows us that 44,000 artists are there already.
It’s an uncomfortable but necessary truth to acknowledge, then: just like playing football, making and releasing recorded music is a ridiculously popular thing to do, because it provides a level of personal expression, happiness, and achievement that millions upon millions crave.
But that doesn’t make it a career. And it certainly doesn’t make anyone who embarks upon it special.
Fact is, as Spotify’s new stats demonstrate, artists are ten a penny. Seven million a penny.
Yet we live in an age where hordes of self-identifying artists with a relative thimbleful of popularity are wielding pitchforks about the fact they can’t buy a car with the proceeds.
To be clear, there are plenty of useful and healthy arguments to be had about the statistics Spotify has just thrust into the ether.
Top of my head, here’s a few of them:
- Could a fairer distribution of Spotify’s royalty payout be achieved with a user-centric model or another alternative?
- Spotify doesn’t pay artists direct. How much of the $50k these 14,300 artists are generating in payouts is being kept by distributors, labels, publishers, and PROs? Is this a fair proportion?
- Should Spotify up its prices around the world to create a bigger royalty pot?
- Spotify says it paid out roughly $5 billion last year to the music industry. But publishers (and songwriters) got much less of it than labels (and artists). Does Spotify really not have the money to pay the publisher/songwriter part of this equation more – or is it just running its business unwisely?
- On that point, what the hell is Spotify doing trying to dock the money it pays songwriters with its legal appeal in the US?
- There is currently zero transference of value from the growth in Spotify’s market cap on the NYSE to the creators who make its platform possible. Is it truthfully impossible to even countenance such a move?
- Does Spotify’s manipulation of its own playlists act as an anti-competitive earnings block to artists on certain deals and in certain genres?
The list goes on, and MBW will keep diving into these points whenever they rear their head.
But as we’ve written before, we can’t go on as an industry pretending that every piece of music, and every artist’s output, carries the same value. It’s not only disingenuous; it’s cruel.
Fundamentally, to have a grown-up debate over all of the above, we first need to achieve something very basic: a simple distinction between popular musicians, musicians with the potential to be popular, and hobbyists. And an acceptance that the latter category is the most populous by far.
It’s an uncomfortable process, sure, but only at its conclusion can we get a truly clear picture of who may or may not “deserve” more money from streaming.
Feel free to argue amongst yourselves about this. Or go do it on Twitter, where your ire and teeth-gnashing literally make the billionaire Jack Dorsey richer with each new globule of textual bile.
I’m off to stand on the touchline, fatigued.
Cinq Music Group’s repertoire has won Grammy awards, dozens of Gold and Platinum RIAA certifications, and numerous No.1 chart positions on a variety of Billboard charts. Its repertoire includes heavyweights such as Bad Bunny, Janet Jackson, Daddy Yankee, T.I., Sean Kingston, Anuel, and hundreds more.Music Business Worldwide