The music industry is always changing, but these changes have perhaps never come so rapidly as they have in 2020. The coronavirus pandemic has shut down, or at the very least radically changed, many areas of life, and that includes how musicians do what they do. A lot of artists rely on touring for a substantial portion of their income, so closed venues present a new challenge. How much money artists make (or don’t) from streaming their music on Spotify has long been a heated conversation, and now a new wrinkle has been added.
Spotify issued a quarterly letter to shareholders last week (as is a regular occurrence), and it notes, “Growth in the number of artists making up our top tier — those accounting for the top 90% of streams — is accelerating; that cohort now stands at over 43,000 artists, up 43% from 30,000 one year ago.”
As Music Business Worldwide Tim Ingham founder notes in a new Rolling Stone column, Spotify routinely writes in its annual results that it wants “to unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art.” Based on that information, Ingham did some math, and it turns out Spotify’s goal is a lofty one. As Ingham notes, “if Spotify can sustain its current annual pace of ‘top tier’ growth (+13,000 per year) forever more, it would take the company nearly 74 years to transform the 43,000 Club into the 1,000,000 Club.”
There are some eye-opening takeaways between the thesis and conclusion as well. For example, Ingham says the data “suggests that those 2.96 million ‘bottom tier’ Spotify artists would have earned an average of approximately $47 each in Q2. Or just over $15 per month.”
Check out the full column here.