MBW Reacts is a commentary series from the The music industry around the world crew. These are our analytical (and sometimes opinionated) reactions to major recent entertainment news stories.
“Our mission is to unlock the potential of human creativity by giving one million creative artists the opportunity to make a living from their art and billions of fans the opportunity to enjoy and be inspired by it.”
It was Spotifythe mission statement of , published in its annual financial statementsover the past five years.
I pointed out earlier that it is only a stupid fantasy. But Spotify’s latest proclamations really hammer home the point.
Last week, Spotify held its now annual Broadcast enabled event, while doing an annual update of its loud and clear platform – a repository of information on how much Spotify royalties and to whom.
In the words of Spotify, loud and clear exists for a reason above all others:[To] provide a valuable basis for constructive conversation”.
The thing is, it’s not the Surface data on Loud & Clear – the data that Spotify wanna you have to pay attention – that makes it the “most constructive conversation” about the music industry and where it’s headed.
To get to the good stuff, you have to dig a little deeper than that.
Here are two key examples of such surface-level data in recent loud and clear update:
- Spotify says that 57,000 generated artists $10,000 or more on its platform in 2022 (on recorded music and publishing royalties);
- He also says that 1,060 artists generated on $1 million on its platform in the same 12 months.
Taken at face value, these numbers point to the ever-widening base of artists earning decent payouts from the world’s largest subscription streaming platform.
Spotify obviously likes this narrative very much. Like his loud and clear The site boasts, “More artists are sharing in today’s booming music economy compared to the heyday of the CD era.”
The thing is, any half-credible analysis of these numbers has to take into account how they change over time.
And when we start to go down that road, those numbers start to take on a different nature — one that goes against Spotify’s wonderfully serious, yet ridiculously silly mission statement.
Looking closer at the facts
Let’s zoom.
loud and clearin admirable detail, tells us how many artists generated annual royalties (again, through records and publishing) above various financial thresholds in 2022.
These thresholds include $10,000+, $50,000+, $100,000+, $500,000+, and $1 million+.
Below you can see four examples of what this information looks like on the loud and clear the site itself:
What to remember: when Spotify says 57,000 artists generated more than $10,000 on its platform in 2022, this number encompasses a wide range of acts – from those that have generated $10,001 last year, down to a handful of artists earning millions on the platform.
To get a more granular understanding, we therefore need to further analyze the numbers on loud and clear to determine how many artists generate distinct sums of money in individual royalty brackets on Spotify.
Below, MBW did just that, using loud and clear information covering the last three years (2022, 2021 and 2020).
NOW. The really interesting thing about the three donuts above isn’t just their beautiful colors – it’s the year-to-year difference between the data they present.
In particular, the year-to-year difference between the richest annual categories ($50,000+) in 2021 and 2022.
Fear not: we don’t expect you to scroll up and do the math in your head. Instead, here are some visuals that sum it all up:
What is striking in the graphs above is the dramatic shrinking in the annual growth in the volume of artists generating above $50,000 one year on Spotify in 2022 vs 2021.
Overall, this bracket of artists (i.e. the $50,000+ categories added together) amounted to 17,800 in 2022 – up by 1,300 over the previous year.
But in 2021, that same category grew year-over-year by 3,100… more … than double its rate of increase in 2022.
Things get more difficult as you move up the income categories.
For example, in 2022, the “$100,000+” category increased by only 600 YoY artists. In 2021, the equivalent figure was almost three times higher, at 1,700.
To go further: in 2022, the “$100,000 – $499,000” category increased by 540 YoY artists… in 2021, that year-over-year growth was 1,330.
Conclusion?
The annual volume growth of “creative artists” able to “live off their art” on Spotify is slow-down – not growth.
At this point, let us recall, once again, Spotify’s (continuing) mission statement: “[T]o unlock the potential of human creativity by giving one million creative artists the opportunity to make a living from their art.
It just seems fair to me that in order for Spotify to individually give this “opportunity” to these creative artists, said acts would each have to generate at least $50,000 on the platform per year.
(Keep in mind whatever these acts “generate”, their royalties will inevitably be reduced once they pay their distributor/publishing administration company/publisher/record label a fee, commission, fee recovery, etc.)
As mentioned, in 2022 there were 17,800 artists generator $50,000 or more on Spotify. That year, their number increased by 1,300.
How long will it take, at this rate of annual growth, for Spotify to reach its goal of “one million creative artists… living from their art”?
Oh, you know, just another 755 years.
Absurd.The music industry around the world