Streaming giant says it paid out a record $9 billion in royalties in 2023.

By Art Raymond

What does it take to earn $1 million a year in royalties from Spotify?

According to the streaming giant’s new 2023 Loud & Clear report, a general accounting of who got paid and how much over the past year, the road to earning a cool million requires moving a lot of units, so to speak. Spotify says as a “general rule of thumb” an artist needs to attract 4-5 million monthly users or 20-25 million monthly streams to hit the seven-figure income bracket on the platform.

Spotify reports it paid out over $9 billion in streaming royalties last year, a figure the company says is the highest annual payment to the music industry from any single retailer and a figure that’s tripled over the past six years.

For a platform that hosts over 100 million tracks from tens of millions of uploaders, busting the $1 million mark is rarified air when it comes to annual royalty payouts. Spotify reports only 1,250 artists hit or exceeded the benchmark last year. Notching $100,000 in royalties was achieved by 11,600 artists in 2023 and 66,000 music makers cashed royalty checks totaling $10,000 or more last year.

Spotify royalties

Spotify pays royalties out of a revenue pool comprising income it derives from selling advertising on the platform as well as cash it collects from premium subscription fees. Last fall, the company announced policy changes that raised the bar on who is eligible to earn royalties when their music, and other audio content, gets played by users. Spotify says tens of millions of the tracks in its catalogue were played between one and 1,000 times the previous year, generating an average of 3 cents per month in royalties. (While the company doesn’t share specific details about its royalty rates, the average per-play payout is reportedly between .003 and .005 dollars.)

https://www.deseret.com/entertainment/2024/03/25/spotify-royalties-taylor-swift-music-streaming-service/