Spotify Wrapped 2019 sparks new discussion about artist income


As Spotify launched the artist-focused element of its Wrapped 2019 promotion yesterday, the streaming service also offered some new statistics. More than 1.2 million artists were listened to for more than 100 hours on Spotify this year during the period covered by Wrapped (January to the end of October, which isn’t a widely-known fact – Mariah Carey must be FUMING…) Meanwhile, 169,000 artists were listened to for more than 10,000 hours on Spotify during that period.

Speculative maths time! If an hour is around 15 tracks on average, that would suggest more than 1.2 million artists with more than 1,500 streams on Spotify in the first 10 months of 2019, and 169,000 artists with more than 150k streams in that period. Using musician Zoë Keating’s recent ‘0.37 cents per stream’ royalties figures – recordings only, with her distributor not taking a cut – that’s more than 1.2 million artists whose tracks are generating more than $5.55 of recording royalties from Spotify this year, and 169,000 generating more than $555.

These stats are meaningless, really: artists are on all kinds of different deals with labels or distributors, and that ‘generating more than $555’ category goes right up to the biggest artists: Post Malone’s 6.5bn Spotify streams this year are certainly generating a LOT more than that. But the point here is that ‘more than 1.2m artists were listened to for more than 100 hours’ seems like a very big number, but when you drill down, many of those artists are earning very small amounts of money from Spotify specifically, and streaming in general.

We don’t make this point to kick Spotify, although some people have taken that line. There’s already a Twitter account called ‘Spotify Warped’ that’s seemingly been created for the sole purpose of quote-retweeting Spotify users sharing their Wrapped data to let them know how how their hours and streams might translate into money: “Congrats! In the year 2019 you gave @muse approximately $5.49. That’s enough for half a gallon of @oatly plus change!” one fan was informed. Oatly being “the original Swedish oat drink company” in case you’re wondering.

Music journalist Eve Barlow offered another angle on this criticism. “Once we’re done being so pleased (and shocked) with ourselves for the huge number of minutes and hours we’ve spent with Spotify this past decade let’s think about how tiny the numbers of cash Spotify has then paid out to all the artists making the music we love!” she tweeted, sparking more discussion about streaming and artist incomes (Music Ally’s editor included). These arguments are familiar, and as ever the many nuances – including defence of and criticism for Spotify and streaming’s actions and impact – need far more than even a string of 280-character tweets to explore.

But here’s something to chew on. Spotify has been open about its big-picture goal for artist incomes: “giving a million creative artists the opportunity to live off their art” is right there in bold type in the prospectus from when it went public in 2018. At the company’s investor day before that, CEO Daniel Ek talked about the ‘top-tier’ artists on Spotify – those that account for the biggest streams and revenues – having grown in number from 16,000 in 2015 to 22,000 in 2017. “My goal over the next few years is to increase that to hundreds of thousands of creators who have material success on our platform,” said Ek, although some commentators (this Penny Fractions article for example) have raised questions about the scale needed to fulfil this promise.

By Spotify’s own figures released this week, it has a lot of work to do: only 169,000 musicians theoretically making more than $555 a year (well, in 10 months) from their recordings on Spotify *before* any distributor / label cut, with an unknown number of those now counted as part of that ‘top tier’ of material earners – if that total carried on growing at the same rate after 2017, it’d be north of 30,000 by now, but that really is speculative maths. But this is the challenge that Spotify is hoping to tackle with its much-referenced ‘two-sided marketplace’ strategy.

That often gets looked at through a single, investor-centric lens: ‘What kind of tools will Spotify launch that it can charge labels and artists to use, and so improve its margins and become profitable?’ It’s an important question, but so is the flipside of hitting that ‘a million creative artists living off their art’ target.

It’s not just about organic growth and more paying subscribers. It’s about delivering more features to help artists use streaming to drive other income, from breaking merch and tickets out of their artist-profile box and continuing to offer guidance on how analytics can be used to plan tours and drive sync / brand revenues through to (please!) exploring how to layer a tips economy and other forms of fan-funding in to streaming.

Spotify’s Wrapped 2019 promotion is so ubiquitous on social media that the royalties-related backlash was inevitable. What would be positive now, though, would be to use this moment to drive a thoughtful, constructive debate in 2020 about how streaming could and should work for artists at all levels. Spotify will, as ever, be the lightning rod for all this – sometimes fairly, and sometimes unfairly. ‘How do we get from here to that point where a million artists living off their music?’ is a key question by which Spotify will be held to account, and that’s  a healthy thing for the company, and for the wider streaming ecosystem that it played such a big role in building.

Written by: Stuart Dredge