Spotify Reports £7.7bn in Royalties Despite Artist Criticism

Spotify announced it paid £7.7 billion in royalties in 2024, the largest payout in music industry history. However, artists continue to criticize streaming earnings.

Huge Royalty Payouts in 2024

In an impressive turn of events, Spotify has revealed that it paid a staggering $10 billion (£7.7 billion) in royalties in 2024. This marks the biggest single-year payout to the music industry ever recorded. Spotify proudly announced that 1,500 artists earned over $1 million in royalties each, marking a drastic increase from the $1 billion total paid out in 2024.

The streaming service’s report, which focuses on royalty payments, highlighted their 2024 payouts as “the largest in music industry history,” likening their achievements to Tower Records during the height of the CD era in the early 2000s.

Artist Backlash Over Streaming Earnings

Despite these astronomical figures, many artists and industry professionals have voiced their concerns regarding the streaming service's compensation framework. Earlier this year, nominees for the Songwriter Of The Year category at the upcoming Grammy Awards opted to boycott Spotify's party. Artists such as Jessi Alexander, Amy Allen, Jessie Jo Dillon, and RAYE, all nominees in this category, decided to skip the streaming platform's celebratory event and will not perform there either.

Transparency in Royalty Distribution

Spotify maintains that it pays royalties to rights holders rather than directly to artists. This system complicates transparency about where the money ultimately ends up. The rights holders are usually record labels, music publishers, or collection societies. A spokesperson explained, “Spotify does not pay artists or songwriters directly. We pay rights-holders, who then distribute the funds according to their individual contracts with the artists.”

Spotify's "Loud and Clear" report indicated that the company upped its payouts from over $9 billion (£7 billion) in 2023. The report also revealed a substantial rise in the number of artists earning between $1,000 (£770) and $10 million in annual royalties, tripling since 2017.

Björk's Criticism of Spotify

Not one to shy away from expressing her opinions, the renowned artist Björk weighed in earlier this year, stating that she believes Spotify is "probably the worst thing that has happened to musicians." This isn't her first critique of the platform; back in 2015, Björk opted not to release her album 'Vulnicura' on Spotify out of respect for her craft.

“It just seems insane,” she commented. “To work on something for two or three years and then just, ‘Oh, here it is for free’. It’s not about the money; it’s about respect. Respect for the craft and the amount of work you put into it.”

Legal Issues and Recent Controversies

In more Spotify-related news, the streaming giant recently won a lawsuit concerning a controversial bundling strategy that resulted in lowered royalty payments to songwriters. This situation arose after Spotify introduced a new audiobooks bundle to its premium subscription service last year.

The company has faced significant backlash recently, particularly after hosting a brunch just before Donald Trump's inauguration and donating $150,000 (£122,000) to the official ceremony.

FAQs

• How much did Spotify pay in royalties in 2024?
  Spotify claimed it paid $10 billion (£7.7 billion) in royalties in 2024.
• Why are artists criticizing Spotify?
  Many artists feel the streaming service's earnings model is unfair and lacks transparency regarding how royalties are distributed.
• Who receives the royalties from Spotify?
  Spotify pays royalties to rights holders like record labels and music publishers, not directly to artists.
• What was Björk's opinion on Spotify?
  Björk has voiced that she believes Spotify is detrimental to musicians and has previously chosen not to release her work on the platform.
• What legal issues has Spotify faced recently?
  Spotify won a lawsuit over a bundling strategy that reduced royalty payments to songwriters.

Shop your favorite album cover poster at our store to celebrate the music you love! Check out our collection here: Architeg Prints.