MBW Reacts is a series of commentaries from Global Music Business team. They are our analytical (and sometimes obstinate) responses to recent major entertainment news stories.
“Our mission is to unlock the creative potential of people by giving millions of creative artists the chance to live their art and billions of fans the chance to enjoy and be inspired inspired by it.”
it was SpotifyIts mission statement, published in annual financein the past five years.
I pointed out before that it’s nothing more a stupid fantasy. But Spotify’s latest statements are really a hit.
Last week, Spotify held its annual event Live streaming event, and also gives an annual update to Loud & Clear platform – a repository of information about how much Spotify pays royalties and to whom.
In Spotify’s words, Loud & Clear exists for one reason more than any other: “[To] provides a valuable platform for a constructive conversation.”
The thing is, it’s not the surface-level data on Loud & Clear – the data Spotify want you pay attention to – that makes for the most “constructive conversation” about the music industry and its direction.
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 the latest report Loud & Clear update:
- Spotify says that 57,000 won created by artists 10,000 USD or more on its platform by 2022 (for recorded music and publishing royalties);
- It also says that 1,060 Artists created on 1 million dollars on its platform for the same 12 months.
At face value, these numbers point to an ever-expanding base of artists making decent money from the world’s largest subscription streaming platform.
Spotify clearly loves that story. Like it Loud & Clear The website boasts: “There are more artists sharing in today’s thriving music economy than there was at the height of the CD era.”
The point is, any reliable analysis of these numbers must take into account how they have changed over time.
And as we set out on this path, these numbers began to take on a different nature – one that runs counter to Spotify’s ridiculously serious but ridiculous mission statement.
A closer look at the truth
Let’s zoom in.
Loud & Clearwith an admirable level of detail, telling us how many artists have generated annual royalties (again, on recordings and publishing) across various financial thresholds in 2022.
These thresholds include $10k+, $50k+, $100k+, $500k+, and $1 million+.
Below, you can see four examples of what this information looks like on Loud & Clear main site:
What we must not forget: when Spotify said 57,000 artists create more 10,000 USD on its platform by 2022, that number sums up a wide range of behaviors – from the people who created $10,001 Last year, there were many artists who made millions of dollars on this platform.
Therefore, to get a more detailed understanding, we need to continue analyzing the above numbers Loud & Clear to determine how many artists are generating different amounts of money in personal royalty brackets on Spotify.
Below, MBW has done exactly that, using Loud & Clear information for the past three years (2022, 2021 and 2020).
Currently. What’s really cool about the three donuts above is just their pretty colors – that’s annual difference between the data they present.
Especially the annual difference between the richer annual categories ($50k+) in 2021 and 2022.
Fear not: we don’t expect you to roll up and do mental calculations in your head. Instead, here are a few images that summarize it all:
What stands out about the charts above is the dramatic drop in the year-over-year growth of the number of artists created above. $50k one year on Spotify in 2022 versus 2021.
Overall, this group of artists (i.e. categories of $50k or more added together) come in at No. 17,800 in 2022 – increase by 1,300 in the previous year.
But in 2021, the same category has grown every year by 3,100… more double its growth rate in 2022.
Things become clearer the higher you go in the income category.
For example, in 2022, ‘$100k or more’ portfolio grows by only 600 YoY artist. In 2021, the equivalent number is almost three times larger, at 1,700.
Going even deeper: in 2022, the ‘$100k-$499k’ category has grown even more 540 artist YoY… in 2021, that annual growth is 1.330.
Conclusion?
The annual growth in the number of “creative artists” able to “make a living from their art” on Spotify is slow down – Are not develop.
At this stage, let’s once again remind ourselves of Spotify’s (continued) mission statement:[T]o unlocking the creative potential of people by giving millions of creative artists the chance to live their art.”
To me, it seems fair that Spotify specifically give that “opportunity” to these creative artists, each of which would need to generate at least $50k on a one-year basis.
(Remember that regardless of what these acts ‘create’, their royalties will inevitably be reduced after they have paid the distributor/publishing management company/publisher/record company a fee, commission, refund fee, etc.)
As mentioned, in 2022, there are 17,800 artists create $50k or more on Spotify. Their number that year was increased by 1,300.
How long will it take, at that annual rate, for Spotify to reach its goal of “millions of creative artists…living off their art”?
Oh, you know, just a 755 years.
absurdity.Global Music Business
