Spotify Paid a Record $10 Billion in Royalties, but Artists See Little of It

Spotify recently released its annual Loud & Clear report, announcing that it paid out a record $10 billion in royalties to the music industry in 2024—a tenfold increase from $1 billion in 2014. However, while streaming has transformed the music industry, many artists and songwriters still struggle to earn a sustainable income.

The report revealed that nearly 1,500 artists earned over $1 million in Spotify royalties last year, and around 100,000 artists made at least $6,000. Yet, industry experts point out that due to the platform’s revenue distribution model, the vast majority of musicians see only a fraction of the total payout. Music publicist Eric Alper notes that most artists “earn just pennies per stream,” making it nearly impossible for all but a select few to make a living from streaming.

Spotify does not pay artists and songwriters directly but instead distributes royalties to record labels, distributors, and rights organizations, which then decide how much to pass on. Typically, signed artists receive only 10–20% of their total earnings after their label takes its share. Independent musicians avoid label deductions but still face distribution and publishing fees.

The company has also faced criticism for cutting royalty rates for songwriters and publishers. Several Grammy-nominated songwriters boycotted a Spotify event earlier this year in protest. David Israelite, president of the National Music Publishers’ Association (NMPA), argues that Spotify’s large payouts are misleading. “In 2024, Spotify co-founder and CEO Daniel Ek cashed out $376 million in stock, while all U.S. songwriters combined received an estimated $320 million from the platform,” he told CBC News

While Spotify has played a crucial role in boosting artist exposure, many in the industry believe the current payment system needs reform. Some advocate for a “fan-powered” model, where subscription fees go directly to the artists a listener plays, rather than the existing pro-rata system that disproportionately benefits top performers. Without changes, smaller and independent artists may continue to struggle for fair compensation.