Spotify paid out a record-breaking $7 billion+ to music rights holders in 2021
Streaming is making music more viable to artists worldwideBy Shawn Knight
The big picture: Spotify paid out a combined $7+ billion to music rights holders in 2021. It's the largest sum paid by one retailer to the music industry in a single year ever - even during the height of the digital download and compact disc era - and more than double what the company paid in 2017 ($3.3 billion).
The record figure pushes Spotify's total payout since founding to $30 billion.
Last year was also the first in which Spotify had more than 1,000 artists generate at least $1 million in revenue through the service. Of those, 450 generated more than $2 million and 130 artists exceeded the $5 million mark, representing increases of 110 percent and 160 percent, respectively, over the last five years.
What's more, Spotify had over 52,000 artists that generated at least $10,000 last year. More than a third live in countries outside of the top 10 music markets and 28 percent self-distribute on Spotify.
Need further proof that the industry is less concentrated than it once was? During the CD era, a quarter of all sales went to the top 50 artists. Last year on Spotify, only 12 percent of revenue came from the top 50 artists.
Keep in mind that these figures are just Spotify's, and don't account for earnings generated from rival streaming services and other forms of distribution. It's very possible that many artists are making multiples of what is portrayed in Spotify's results.
Spotify founder and CEO Daniel Ek acknowledged that it's difficult to make it in music. "I get that. But the figures we're sharing show that Spotify is improving on the music industry of the past, and more and more artists are able to stand out in the streaming era," he added.
Zooming out, we see that the three major labels brought in over $25 billion in revenue in 2021, with $12.5 billion of it coming from streaming alone.
Image credit Burst