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 back to Louder & Clearer, Part 2!
Quick recap: in Part 1, we showed that the average slice of the Spotify pie is shrinking, that every artist is losing because of this, and that Spotify is actively doing things that are making this happen.
We did this by plugging the Payouts data from Spotify’s annual Loud & Clear report into our trusty spreadsheet, and doing some simple analysis. This requires no special access or even insight, just an understanding of how almost all streaming platforms work.
And I do mean “almost all streaming services.” Something to keep in mind: while Spotify is routinely and brazenly (to this observer) both acting in bad faith and gaslighting the music community about the impacts of their actions, they’re just one of many streamers, the majority of whom operate platforms that work in exactly the same way.
Which is something to keep in mind in this section in particular. The shrinking slice analysis was specific to Spotify, and may or may not be happening at other streamers, especially given specific things Spotify is doing to shrink it, like “Discovery Mode.”
But Part 2 is about how income is moving around within the pie over the years. Which means that the findings in this section are more likely to be endemic to streaming writ large, and less likely to be due to actions taken by specific actors.
This also means that it’s the bit most worth paying attention to! Especially if you too care about a music economy that supports working and mid-tier artists as well as superstars. Because right now… this ain’t it.
“THE NEW GLOBAL CLASS OF $100K ARTISTS” is the biggest 4-year loser
Things you can’t help but notice when looking at platform economics: the rich get richer, upward mobility gets harder, the middle erodes. (The poor don’t get poorer, actually, they get something worse, which is left behind.)
That’s certainly the case at Spotify. 13,800 new artists in the $100k tier is indeed something to celebrate, as Spotify does this year in the second takeaway of their Loud & Clear report, the all-caps portion of the section header above.
“More artists earning $100k+ a year” IS great — but it’s very different from “artists in the $100k+ tier are doing well.” From Part 1, we know that individually, they’re not (just like everyone else). How are they doing compared to everyone else? I know I gave it away in the section title, but bear with me a second.
We can measure how tiers are doing compared to each other by looking at their change in “poolshare”, aka the amount of income that each tier accounts for within the pool overall.
Alas: the $100K+ tier is the biggest poolshare loser in the four years I’ve been tracking this. Here’s the table:
So it seems likely that unchecked platform economics are indeed doing that thing they do: hollowing out the middle.
The change in poolshare also tells us the change in where the money is, well, pooling. I’ll give you one guess where.
$1B+ has shifted from working- and mid-tiers to the “elite” tiers during the same period
Looking again at that poolshare table above, the “elite” tiers earning $1M+ gained a total of +3.52 percentage points worth of poolshare, while the mid- and working-tiers ($1K–$500K) lost, well, exactly that: -3.52 points. Which makes sense, when you understand that this is a zero sum game — one group’s poolshare gain is another’s loss.
In dollar terms, we can think of it this way: compared to the 2022 poolshare distribution, more than $1B has shifted from the working and mid-tier artists to the elite-tier.
This “money concentrating at the top” issue is, mind you, completely different from the shrinking-slice problem discussed in Part 1.
So it comes with its own set of drawbacks, namely making it increasingly difficult for labels to justify investing in artists who aren’t aiming to be massive pop stars.
Speaking of aiming to be a pop star…
There’s a new $1M ceiling in town
Remember when I said that a consequence of platform capitalism always seems to be “upward mobility gets harder”? Here’s how that’s manifested over just this past year:
Within the working and mid-tiers, upward mobility did get easier. More artists moved up or into these tiers than the year before, which is good news — more about this in the next/final section.
But where it goes (and stays) negative – where fewer artists moved up or into tiers than did the year before – is at the top of the ladder, where the wealth is concentrating. It’s the new ceiling.
Contrast this with Spotify’s 3rd takeaway, “MILLION DOLLAR CAREERS”, which is wall to wall obfuscation and misdirection.
In it, they frame the 1,500+ artists now earning $1M+ as evidence that streaming is building a new professional class; they describe the $10M+ artists as having “graduated” to that level, as though they moved up and made room for others to follow; and they go so far as to suggest that capturing a tiny fraction of Spotify’s total streams is enough to get there, as if $1M is just sitting there waiting to be claimed, rather than another artist’s loss.
Meanwhile, the data shows that only 90 new artists entered the $1M club last year compared with 200 the year before, a 55% drop.
Not so much a class forming, then, as a ceiling hardening. People are moving up the ladder… but fewer and fewer of them are moving up past the $1M mark.
And even above the ceiling, the wealth continues to concentrate. We’ve already mentioned the over $1B that, since 2022, has shifted from the working and mid tiers and into the $1M+ ones. But looking into how that breaks down within those tiers further, it’s an even bigger horror show:
$10M+ (80 artists): +$830M (81% of the entire shift)
$5M-$10M (150 artists): +$342M
$2M-$5M (510 artists): +$57M
$1M-$2M (800 artists): -$206M
So despite being in the “elite” tier grouping, the $1M–$2M tier is actually a net loser. What really happened was: $1.2B went to the $2M+ and up tiers— a billion from the working and mid tiers, plus another $206M from the $1M–$2M band beneath them.
80 artists at the $10M+ level captured 81% of the total shift. Out of 303,000! Basically, the money flows up past the $1M tier and pools at the top. Here’s the full table:
Which means I need to adjust what I said above, about how wealth concentrating at the top is likely to make it “increasingly difficult for labels to justify investing in artists that aren’t aiming to be massive pop stars.”
Correction: the new ceiling, and the upward flow of revenue even WITHIN the top tiers, means it’s increasingly difficult for labels to justify investing in artists that AREN’T ALREADY massive pop stars.
Which, in the opinion of someone interested in a vibrant and exciting music ecosystem vs. a system that only works for a few established pop stars, is even worse.
What’s causing this?
A few things, in my humble opinion.
Algorithms are reinforcement mechanisms. The more something gets listened to, the more it gets recommended, the more it gets listened to. Discovery Mode pretends to address this cycle, but it does so while reducing the income an artist actually receives for their streams, so it wouldn’t show up as a positive impact in the above charts (or in, you know, real life, outside of “exposure”).
There’s also the general breakdown in media and criticism. Big pop stars don’t require as much context… that’s why they’re big pop stars. A “Best New Music” on Pitchfork or a bunch of positive reviews used to change your career trajectory, now it barely registers. This is far more dire for working and mid-tier artists, because that context helps audiences both find and appreciate them.
Combine that with the “paradox of choice” phenomenon where, when confronted with a ton of options, people tend to go for the known, safer thing. In this case, already well-known and often older music benefits, music that for the most part was released in a time before streaming was the main game in town.
You could argue that, aside from Discovery Mode, these latter reasons aren’t really Spotify’s “fault” exactly. But the “all you can eat streaming buffet” is very much at the heart of both of these second points, and I think it’s fair to say that Spotify has been the most aggressive proponent of exactly this system.
They got what they wanted, and they got rich. Aside from the super-elite tier artists, everyone else seems to be losing in the bargain.
Next time, on the final episode of Louder & Clearer…
The streaming music catalog keeps getting bigger, but attention is finite and user growth has leveled off, especially in markets that can charge top dollar. So more and more artists are left to fight it out with each other, especially at the bottom rungs.
It all seems like a dire situation — but there are reasons to be hopeful, thanks to some actual bright spots in the data (gasp), as well as genuinely plausible ideas for improving the system overall. Thanks for reading, and see you then!
Once again! 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.
Thanks for writing this Hunter, and also for pointing out these economics aren’t unique to Spotify. That said - the effects you note around a hollowing out of the middle of music are exactly the anecdotal effects that I’ve seen over years in music with professional mid-tier musicians (not to mention lower tier). On one hand, there are more artists than ever making a living from streaming and access is easier than ever. But the cultural treasure artists aren’t thriving, and the pro-rata business model with fed by algorithmic push still feels misguided at the core to me. I still believe the best thing the average punter can do is apportion their listening to services like QoBuz where there are fewer listeners, more emphasis on editorial discovery, and less emphasis on algorithmic listening (less slicing of the pie) resulting in higher percentage payouts to the artists that are listened to there, or to services like SoundCloud where a portion of income is paid on a user-centric basis.
Great work. I featured in the pod today.