“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” - Upton Sinclair
This report is a labor of love from Infinite Catalog, a royalty accounting software platform that helps hundreds of independent labels, managers, and publishers simplify royalties and report to tens of thousands of artists. Try it free today, and sure why not, use code LOUDERANDCLEARER to get 30% off 3 months or an annual plan.
Hello and welcome to the 3rd edition of Infinite Catalog’s Louder & Clearer, Part 1!
In 2024, I noticed Spotify’s annual Loud & Clear reports include what they call “Payouts” data (more accurately, the number of recording artists across different royalty income tiers year over year).
Which got a royalty nerd like me wondering… the uniformly positive “takeaways” in their reports always, let’s say, differ from what the hundreds of independent labels and publishers we work with at IC seem to be going through… does this data reveal anything interesting that Spotify is leaving out, intentionally or otherwise?
The answer turned out to be yes, and analyzing it has grown into an annual tradition. So I’m back again with my trusty spreadsheet, healthy skepticism, and non-existent graphic design skills to try and illuminate what’s really going on at the world’s largest music retailer.
And what’s really going on is… not great, especially for working- and mid-tier artists.
But what’s most striking is that based on the data we have, even artists that are “winning” – artists making plenty of cash, or ones making more year over year – are still making less than they otherwise could have.
Since 2022 at least, everyone’s a loser, baby.
We’ll get into the good news later. In Part 1, it’s pretty grim. Here we go.
In 2025 the Spotify pie grew +$1B, while the average per-artist slice shrank (at least) -$217
The big tension in the music industry’s streaming era is this: the overall income pie keeps growing, while the average slice paid to individual artists, lately at least, keeps shrinking. On that front at least, this year is no different.
“THE $11B GROWTH ENGINE” goes Spotify’s big headline this year. $1B in new pool money in the past year alone.
Meanwhile: the average $ per artist slice shrank year over year (at least): -$217. The 10% growth in income is great, but it came alongside (at least) an ~11% growth in artist pool headcount, so the average wage went down (at least) -$217, or -0.7%.
About those “at least”s. Spotify gives us the total revenue in the pool, but they only report the number of artists earning $1k or higher, so we don’t know how many earned between 0-$1k. (Despite the demonetization of tracks with fewer than 1k streams, you can still (and many, many do) earn between 0-$1k).
Every single reported tier increased in headcount, so I think it’s fair to say the unreported bottom tier increased as well – hence the overall average slice shrinking “at least” -$217.
And when the average slice shrinks, even if your income went up, it went up less than it otherwise would have.
Which is a familiar feeling these days — even when you’re making more, it still feels like you’re falling behind — because in a very real sense, you are. Spotify, it seems, is a microcosm of the collective experience in our current version of capitalism, where every individual is, in a very real sense, losing.
The four year picture is worse (even with a recovery), and with inflation it’s brutal
Was this a one time deal?
Our spreadsheet has data going back to 2022. Let’s look at the average slice itself over the years, by dividing the total dollars by the total number of artists (aside from the unreported $0-$1k ones of course, so keep that “at least” logic handy).
The average slices over these years went like this:
2022: $37,657
2023: $34,655
2024: $36,496
2025: $36,280
A huge dropoff from 2022->2023, then a recovery, then last year’s -$217 dip. Overall, the average slice has fallen (at least) -$1,377, or -3.7%.
About that recovery. Guess when Spotify raised prices? July 2023, and again in July of 2024. So 2024 is the year that saw the fullest benefit of those, before the number of new artists joining the pool once again began to outpace the growth in dollars. And while it’s great they finally raised prices, for my money, what this actually does is prove their decade-long suppression of artist wages prior to this, as we’ll talk about in the next bit.
Also there’s also this thing called inflation, and while it may not seem fair to Spotify to bring that into the mix, it’s certainly very relevant to both a) the artists trying to use their royalty dollars to make ends meet, and b) Spotify’s decade-long refusal to raise prices in step with it – which, as we can see from the 2024 recovery, would have had a majorly positive impact on artist wages.
Inflation gets applied to the slice, and from 2022-2025 it was roughly 10% across the US and EU (slightly higher in the UK). This turns the -$1,377 loss into a “real” decline of roughly -$5,100, or -12.4%, in purchasing power over four years. At least!
Again, broadly speaking that’s impacting every artist in the pool, even the apparent winners. During a period that saw two price hikes, and the royalty pool grow $2B. Big yikes.
It’s not just more mouths to feed
To be clear, new artists joining the pool is a good thing!
Making the music industry more hospitable to working- and mid-tier artists is kind of the whole point of this report (and Infinite Catalog, natch). So I don’t think the “problem” is “more new artists joining the pool.” Which also means that the solution isn’t limiting or reducing that number by, say, raising the 1k stream threshold or some other arbitrary gatekeeping mechanism.
Of course, the massive increase in new artists joining the pool also includes a lot of scammers, money launderers, slop generators, artist impersonators, etc, who siphon money away from what we must now call “real” artists.
Beatdapp has estimated the amount being siphoned off at around 10% per year, which would be a cool $1.1B in 2025. Spotify claims to be doing more on this front, and as we’ll discuss in Part 3, it appears that they actually are, which is great and worth celebrating.
But when you couple the vibe of the report with the reality of a shrinking slice, it starts to feel like being told you should be grateful for your seat on an increasingly crowded and sinking ship, while the owners of that ship profit from your slow-motion demise on their nearby yacht. So I don’t really think it’s fair for them to hide behind the “more artists is good” thing, even though it is a good thing.
Especially when it’s NOT just more mouths to feed. Spotify actively does things that suppress artist (and songwriter) wages. Here are three:
Discovery Mode, which “allows” artists/labels to agree to lower royalty rates in exchange for a better chance at algorithmic discovery. This costs Spotify nothing, disadvantages artists who don’t play ball, and is a race to the bottom for literally everyone (the more people opt-in, the less it works).
The legally-dubious “bundling” of audiobooks and podcasts into their subscription tiers shunts an estimated $230M worth of mechanical royalties away from songwriters and publishers in one fell swoop. Granted, this income isn’t included in the Payouts data, but it’s illustrative of how Spotify is willing to increase their profitability at the direct expense of the folks in the music industry they claim to care about.
But it’s the lack of price increases that most clearly demonstrates the role Spotify has had in suppressing artist wages. The price of Spotify is well within their control, so I think it’s fair to say they’ve had a hand in the phenomenon, rather than it being purely a product of systemic conditions or a growing number of mouths to feed.
Spotify kept its US Premium price at $9.99 from 2011 to mid-2023. The cost of this choice, in which growth is prioritized over profitability, wasn’t just paid for by investors while Spotify was running a deficit – it was also borne by artists, whether in the form of the slices shrinking, or just in how much their growth was otherwise held back.
Raising prices is the surest way to grow the slices, and the obvious answer to a rising headcount in the artist pool, but why limit your company’s growth upside when you can get artists to pay for at least a chunk of it?
By comparison, Netflix has a model in which there’s no similar benefit from suppressing prices, and they raised prices repeatedly over the same period. When Spotify finally did raise prices in 2023, the company swung from a €500M loss to a €1.1B profit in under two years, indicating the headroom in price was there.
Unlike Spotify’s other investors, artists got no guarantee of equity, and they certainly didn’t get a say. While everyone else got to cash out, artists got a system incentivized to limit the growth of their individual careers, and a so-called “Loud & Clear” report proclaiming transparency, bought and paid for, in part at least, with their incredible shrinking slices.
Next time, on Louder & Clearer…
Spotify does something every year in their report, which is to claim “more artists than ever earning $X!”
This year they chose to highlight the $100k+ tier as one to celebrate… which is curious, given what’s really going on with that tier in particular. More on that next time. Thanks for reading!
This report is a labor of love from Infinite Catalog, a royalty accounting software platform that helps hundreds of independent labels, managers, and publishers simplify royalties and report to tens of thousands of artists. Try it free today, and sure why not, use code LOUDERANDCLEARER to get 30% off for 3 months or an annual plan.
Since all the streaming services, including Spotify, pay based on streamshare, a reduction in average royalties per artists just means users are listening to a broader range of artists than in the past (previous artists have a slightly smaller streamshare as more artists join the total pool of streams). Your gripe that the average artist's earnings are declining is really an argument that consumers shouldn't diversify listening or give new artists a chance and should only listen to the top, established artists... Is that really what you want?
Also, your point about raising prices is extremely shortsighted, as it would have significantly reduced the growth of total subscribers. New users are less likely to try something the higher the initial cost, but once they start using something and realize the value they are less likely to leave due to price increases (so long as experienced value > price). It was extremely smart for Spotify to grow subscriber penetration in markets to a signifcant level, locking in users, before raising prices slowly to reflect the value being provided. This maximizes the long-term royalties that will be paid out to the music industry.