Spotify made history in 2024 by paying a record-breaking $10 billion (£7.7 billion) to the music industry, marking the highest annual payout ever made by a single retailer.
The streaming giant highlighted this achievement as part of its ongoing efforts to demonstrate its financial contributions to the music business. However, this massive payout comes amid ongoing debates about the fairness of streaming royalties, with many artists and songwriters arguing that their earnings remain insufficient despite Spotify’s growing revenue. The conversation around fair compensation in the streaming era remains a heated and unresolved issue.
The tension surrounding streaming royalties was underscored earlier in the year when several Grammy-nominated songwriters staged a boycott of an awards event hosted by Spotify. Their protest centered on frustrations over the financial realities of streaming, where many artists feel they receive only a fraction of what their music generates.
The new figures from Spotify have reignited these concerns, prompting renewed discussions about whether musicians and songwriters are being fairly compensated for their work in the digital streaming economy.
In response to these concerns, a Spotify spokesperson clarified that the company does not directly pay artists or songwriters but instead distributes royalties to rights holders such as record labels, publishers, and collection societies.
The company emphasized that it has no direct control over how much of these earnings ultimately reach individual artists, as distribution depends on contractual agreements between musicians and their respective labels or publishers. This statement reflects the ongoing complexity of the streaming revenue model, in which intermediaries play a significant role in determining how artists get paid.
Industry estimates suggest that artists typically earn about 16% of a stream’s total value after their earnings pass through record labels and other intermediaries. This means that a musician whose music generates £100,000 on Spotify might take home only £16,000 before taxes.
While this model is common across streaming services, it has led to growing discontent among artists, many of whom rely on additional income streams such as live performances, merchandise sales, and brand partnerships to sustain their careers. The reality of streaming economics has left many musicians questioning whether digital platforms truly serve their best financial interests.
Spotify has defended its payout structure by emphasizing that more than two-thirds of all music revenue goes directly to recording and publishing rights holders. The company also noted that, unlike traditional royalty models, streaming services do not pay artists on a per-stream basis. Instead, revenue is pooled and distributed according to various licensing agreements.
To promote greater transparency, Spotify publishes an annual Loud and Clear report, which details how much money is paid out to the music industry. According to the latest report, the company’s 2024 payments marked an increase from the more than $9 billion (£7 billion) paid out in 2023.
The report also highlighted a notable shift in artist earnings over the years. Since 2017, the number of musicians generating between $1,000 (£770) and $10 million annually in royalties has tripled, suggesting that more artists are earning sustainable income from streaming.
Taylor Swift was named Spotify’s most-streamed artist globally in 2024, with more than 26 billion streams. Her success came during the release of The Tortured Poets Department: The Anthology, a double-length album that dominated streaming charts.
Swift’s history with Spotify has been particularly significant, as she was one of the first major artists to publicly challenge the platform over royalty payments. She removed her entire catalog in 2014 as part of a boycott before rejoining in 2017.
While some artist boycotts have shifted focus to other issues—such as Neil Young and Joni Mitchell removing their music in protest of Spotify’s association with podcast host Joe Rogan—concerns over royalty payments remain a pressing issue in the industry.
A large-scale survey of European musicians conducted last year found that about 70% were dissatisfied with their streaming income. The ongoing frustration among artists suggests that, despite Spotify’s record-breaking payouts, the debate over fair compensation in the streaming era is far from over.
As streaming continues to dominate the music industry, pressure is mounting for changes that could ensure a more equitable distribution of revenue for the artists who create the music in the first place.
