Music Business Worldwide

Spotify Just Dropped A Stat That Changes Everything...

March 24, 2022 Music Business Worldwide Season 5 Episode 2
Music Business Worldwide
Spotify Just Dropped A Stat That Changes Everything...
Show Notes

Welcome to the latest episode of Talking Trends, the weekly podcast from Music Business Worldwide (MBW) – where we go deep behind the headlines of news stories affecting the entertainment industry. Talking Trends is supported by Voly Music.

This week on Talking Trends, MBW founder, Tim Ingham, responds to a new set of statistics released by Spotify about what artists earn from its platform.

Those stats, published on Spotify's Loud & Clear site, reveal that 16,500 artists generated over $50,000 in royalties from Spotify in 2021.

But, Ingham argues, this wasn't the most revealing piece of data issued by Spotify. He focuses in on a number buried towards the bottom of the Loud & Clear site: Spotify estimates that around 200,000 artists on its platform are “professional or professionally aspiring”.

Spotify has partly estimated this figure, Ingham explains, via two key questions.

The first is: How many of the 8 million artists on Spotify's platform have released fewer than 10 tracks? The answer might surprise you: it's 5.4 million, or just over two-thirds of artists on the service.

Spotify has then calculated how many of the 2.6 million artists on its platform with more than 10 tracks are popular enough to also have more than 10,000 monthly listeners.

The answer? Just 165,000 acts.

Separately, Spotify has estimated that 199,000 artists sold a ticket to a live concert in 2019 (pre-pandemic) via the likes of Songkick, Ticketmaster and other platforms.

This is how Spotify gets to its estimate of 200,000 artists on its service that are “professional or professionally aspiring”.

Argues Ingham: "To put it a slightly crueller way, 98% of the 8 million artists on Spotify today either aren’t popular enough to have 10,000 monthly listeners, or have released less than 10 tracks to date."

He adds: "Spotify’s own stats show that just 0.2% of [the 8 million] artists on its platform are generating $50,000 or above per year. As a standalone stat, 0.2% sounds like a scandal.

"But now we can move that [narrative] on, and ask what percentage of genuinely 'professional or professionally aspiring' artists – that club of 200,000 – are generating more than $50,000 a year on Spotify. 

"And I’ll tell you: it’s just over 8%. Eight percent – or around one in 12 – artists deemed 'professional or professionally aspiring' by Spotify are now generating more than $50,000 dollars on that one platform per year.

"Is eight percent good enough? Is having one in 12 commercially meaningful artists generating $50,000 a year on Spotify a positive or a negative?

"Let that debate rage. But let it rage with the key information that the vast majority of artists on Spotify – 5.4 million, or more than two thirds of all acts on the platform – haven’t even released enough tracks to fill an album."