Just 15pc of artists on Spotify make more than $1,000 a year

Rita Ora playing at a Spotify event in 2018

Credit: Getty Images

The vast majority of artists on Spotify are making less than $1,000 (£717) a year from the streaming service, despite it paying out billions in royalties last year.

The Swedish company, the world’s biggest music streaming service, on Thursday released its most detailed figures on its payments to the industry in response to growing scrutiny of the amounts artists are earning from streaming.

Its total payments, which include those to rights holders such as record labels as well as artists, rose to $5bn last year, up from $3.3bn in 2017. However, around a third of this went to the biggest 500 artists, according to an analysis from industry research firm Music Ally.

While Spotify has been widely credited with reviving music industry revenues after years of piracy-induced declines, artists have continued to say they make tiny amounts from the service, with fractions of a cent made for each stream. 

Spotify, which accounts for around 20pc of total music industry revenue, pointed to growing numbers of artists generating substantial sums.  The number of artists making more than $1m a year has increased from 450 to 870 over four years, and the number making $50,000 or more rose from 7,300 to 13,400.

Protests outside of Spotify's office in Madrid this week

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The number making $1,000 or more roughly doubled to 184,500. However this remained at around 15pc of the 1.2m  artists with more than 1,000 followers on the service.

Spotify, which charges listeners £9.99 a month, said it had made the music industry more diverse and lowered barriers to entry compared to the days when artists required heavy promotional budgets. 57,000 artists account for the top 90pc of streams, four times as many as six years ago.

It also says it helps listeners discover new artists, meaning they might spend money directly supporting them by attending concerts or buying merchandise. “Streaming has widened the number of artists who can make money, but a lot of these artists aren’t making much of it,” said Stuart Dredge, Music Ally’s editor. “The number of people competing for that money is growing, there’s an enormous long tail.”

This week, musicians have organised protests outside Spotify offices demanding more payments from the service.