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Spotify Reportedly Generated $4.5 Billion for Independent Artists and Labels in 2023

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Spotify Generated For Indies in 2023 - iMusician

The changes to Spotify’s royalty payout model have been a hot topic for a while now. Many in the industry, particularly independent artists and labels, have been asking: ‘How will this affect the royalties I generate on the platform?’ Now, Spotify claims to have the much-needed answer. But does it really?

Record-breaking $9 billion in royalties for 2023

A couple of days after the Grammys (where host Trevor Noah delivered a punchline about Spotify ripping off artists), the streaming giant announced through its Loud & Clear page that it paid out $9 billion in royalties for 2023 to various music industry bodies. This figure has more than tripled over the past six years, resulting in a total of $48 billion in royalty payouts by Spotify since its establishment in 2008.

Spotify CEO Daniel Ek took to social media to break down the $9 billion, revealing that independent artists and labels generated $4.5 Billion, reportedly marking a historic milestone for the ‘indies.’ 2023 is claimed to be the first year independent artists accounted for about half of the entire industry generated by Spotify. The figure was further backed up by Dr. Richard James Burgess, CEO of A2IM, representing over 600 independent music companies.

Despite Spotify’s attempts to clear its name and prove that it is not, in fact, ripping off independent artists and labels, experts claim that the new royalty model will have a detrimental effect on the indies. According to Billboard’s estimates, two-thirds of the Spotify song catalog will be impacted by the ongoing changes, with millions of tracks not able to reach the new 1,000 streams threshold.

And where will the money previously paid to the artists who are not making the cut go? Spotify’s royalty pool, from which 0.5% will be shifted towards more popular artists and tracks.

Eager to learn more about Spotify’s new royalty scheme? Check out our article on the major changes Spotify has planned for 2023.

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