spotify music industry payments

Spotify music industry payments topped $9 billion in 2023 and have surpassed $48 billion overall, according to the company. Photo Credit: Amy Shamblen

Amid the high-stakes Universal Music-TikTok licensing showdown, Spotify says it’s paid north of $48 billion to the music industry to date – including over $9 billion during 2023 alone.

Spotify took to social media to reveal the industry-payment milestone, which it intends to elaborate on in its forthcoming Loud & Clear report. That annual breakdown, featuring a variety of other noteworthy stats, is expected to release sometime next month.

At present, though, the platform is taking the opportunity to reiterate that it “pays the vast majority of every dollar” generated via music to rightsholders. And as mentioned, these payments, covering the use of recordings as well as compositions, have surpassed a cumulative total of $48 billion since Spotify’s inception, according to the company.

Also as highlighted, 2023 delivered a record $9 billion in industry payments from Spotify – a figure that has by the service’s calculation “nearly tripled over the past six years.” (Bearing in mind the points, Spotify has for some time been working to expand its revenue base through non-music offerings, among them two-sided marketplace initiatives, audiobooks, podcasts, and more.)

Bigger picture, while it’s unclear precisely how much TikTok pays for the on-platform use of music, logic and evidence suggest that the amount is dwarfed by that put up by Spotify.

Universal Music Group (UMG), still embroiled in a licensing confrontation with TikTok, as noted, said last month that the ByteDance-owned app’s payments accounted for only about one percent of its (UMG’s) annual revenue – with a fresh proposal from TikTok having allegedly suggested a lower payment amount.

Furthermore, as we’ve explored in detail, UMG’s TikTok qualms aren’t limited to monetary terms. The Big Three label has also alleged that an unchecked flood of AI music on TikTok is part of a broader effort to “massively dilute the royalty pool for human artists.”

Of course, whether that firmly worded statement is fact remains the subject of debate; TikTok has fired back against the claims and attempted to place the blame on UMG’s “greed.” Not up for debate, however, is Spotify’s comparative responsiveness to concerns voiced about what the majors deem problem areas.

Last May, for instance, when Spotify ripped down a number of songs made by Boomy over purported fake streams, besides temporarily blocking the AI music generator’s new uploads for good measure, it reportedly did so at the behest of UMG. (Boomy subsequently bolstered its verification process and, after that, inked a distribution pact with Warner Music’s ADA.)

Now, with UMG leading the charge in pursuit of streaming-compensation pivots, Spotify has ceased paying recording royalties on works that fail to hit 1,000 annual streams, taken aim at white-noise uploads, and started fining distributors for alleged fake streams, to name a few changes that could hurt many indie and unsigned acts.