How Much Did Spotify "Steal" from Indie Artists in 2024?
Where did the revenue go for 14 billion streams? An analysis presented by Tony van Veen, CEO of Disc Makers
Where did the revenue go for 14 billion streams? An analysis presented by Tony van Veen, CEO of Disc Makers
Luminate, formerly known as Nielsen SoundScan, recently released its 2024 State of the Music Industry report. A key focus of this report is the impact of Spotify’s policy change from late 2023, which stopped paying royalties for tracks with fewer than 1,000 streams.
Today, we’ll break down what this means for independent artists and calculate how much in royalties Spotify withheld from them.
Spotify’s Monetization Breakdown
Spotify’s catalog consists of 222 million tracks. Here’s how they break down by stream count:
- 33 tracks had over 1 billion streams (0.02% of total tracks).
- 492,000 tracks had 1 million to 1 billion streams (~0.25% of total tracks).
- 2.1 million tracks had 100,000 to 1 million streams (~1%).
- 24.1 million tracks had 1,000 to 100,000 streams (~12%).
The remaining 87% of all tracks (175.5 million songs) had fewer than 1,000 streams—meaning they were demonetized under Spotify’s new rule.
How Many Streams Went Unpaid?
To estimate the royalties that weren’t paid, we categorize these 175.5 million demonetized tracks further:
| Streams per Track | Number of Tracks | Assumed Avg. Streams per Track | Total Streams |
|---|---|---|---|
| 0 - 10 streams | 93.2 million | 2 streams | 186.4 million |
| 11 - 100 streams | 47.7 million | 40 streams | 1.9 billion |
| 101 - 999 streams | 34.6 million | 350 streams | 12.1 billion |
| Total | 175.5 million | 81 streams (avg.) | 14.2 billion |
With an average Spotify royalty rate of $0.0033 per stream, we can now calculate the lost revenue.
How Much in Royalties Was Lost?
| Streams per Track | Total Streams | Estimated Lost Royalties |
|---|---|---|
| 0 - 10 streams | 186.4 million | $620,000 |
| 11 - 100 streams | 1.9 billion | $6 million |
| 101 - 999 streams | 12.1 billion | $40 million |
| Total | 14.2 billion | $46.9 million |
In 2024, Spotify withheld approximately $47 million in sound recording royalties from independent artists whose tracks had fewer than 1,000 streams. This does not include additional unpaid publishing royalties for songwriters and publishers.
Where Did That Money Go?
Spotify did not keep the money—it redistributed these royalties to tracks that surpassed 1,000 streams. This means the top artists and major labels benefited from this policy change.
According to Luminate, the top 10 streamed songs of 2024—from artists like Benson Boone, Sabrina Carpenter, and Billie Eilish—collected a significant share of this reallocated revenue.
What Can Indie Artists Do About It?
Since leaving Spotify isn’t a practical solution, independent artists should treat Spotify as a discovery tool rather than a revenue stream. Here are three strategies to adapt to this new reality:
1. Use Spotify for Discovery, Not Revenue
- Think of Spotify like radio—it helps with exposure, but won’t generate significant income.
- Algorithmic playlists like Release Radar and Discover Weekly can help you reach new listeners.
2. Push Your Tracks Beyond 1,000 Streams
- Focus on email marketing, social media engagement, YouTube presence, short videos, and live performances.
- Drive streams to get your tracks past the 1,000-stream threshold so they monetize.
3. Monetize Beyond Streaming
- Sell physical media: CDs and vinyl records can generate real revenue.
- Perform live: Gigs, concerts, and tours provide steady income.
- Merchandise: Sell T-shirts, posters, and other products.
- Sync licensing: Get your music placed in TV shows, films, and advertisements.
Streaming is now an industry dominated by the top 3-4% of artists, who collect the majority of royalties. For emerging artists, alternative revenue streams are critical.
Spotify’s demonetization policy means small artists lose out, while major artists benefit. However, by focusing on discovery, strategic marketing, and diverse income streams, independent musicians can thrive despite these challenges.
