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Welcome to the latest episode of Talking Trends from Music Business Worldwide (MBW) – where we go deep behind the headlines of news stories affecting the entertainment industry. Talking Trends is supported by Voly Music.
As the years tick by, more and more DIY artists will earn a liveable chunk of annual cash from Spotify.
That’s an inevitability, right? Wrong.
In 2022, according to Spotify’s own figures, the total number of DIY/self-releasing artists who generated over USD $10,000 in royalties on the platform annually – from both recorded music and music publishing combined – actually fell year-on-year.
That fact is revealed (and chewed over) in the latest episode of Music Business Worldwide’s Talking Trends podcast, presented by MBW founder, Tim Ingham.
Ingham explains that, according to Spotify’s Loud & Clear data, just over 14,700 DIY artists generated more than $10k on Spotify in 2022.
That figure was down on the number of DIY artists who managed to do the same thing in 2021… despite the total number of artists (i.e. DIY plus non-DIY acts) who annually generated more than $10k on Spotify growing last year.
You can read an extended transcript of this episode of MBW’s Talking Trends below – with illustrative charts – and/or listen through here:
The data point I’m focusing on today is illuminating in terms of which types of artists are earning how much from Spotify.
It runs counter to some of the music biz noise swirling around streaming services and DIY artists – by which I mean self-releasing artists, who distribute their music via platforms like DistroKid, TuneCore, and CD Baby.
Mathematically, the number of DIY artists who generated USD $10,000 or above annually on Spotify actually declined in 2022 vs 2021. And that’s based on Spotify’s data, not mine.
Before we delve into the wider context of what’s happening here, I want to walk you through the relevant numbers.
Apologies if this gets a little ‘in the weeds’ or too repetitive, but we’re fairly assiduous characters here at Music Business Worldwide, and I don’t want you to think we’ve put a foot wrong.
When Spotify held its Stream On event on March 8, it also updated its Loud & Clear website, where the company presents data relating to its royalty payouts to artists of various levels of popularity.
The latest update to Loud & Clear presents information pertaining to the calendar year of 2022.
Spotify tells us that in said calendar year – that’s last year – 57,000 artists, in total, generated over $10k in royalties from Spotify, across both recorded music and music publishing.
That number, the 57,000, represented a year-on-year increase of +4,400 versus the number of artists who generated $10k or more on Spotify in 2021 (52,600, see below).
Things get curious when you start cross-referencing the numbers I’ve just mentioned with other key stats from Loud & Clear.
The latest edition of Loud & Clear tells us that “a quarter of artists who reached over $10,000 in earnings [in 2022] released music through an artist distributor”.
So approximately a quarter – or 25% – of the 57,000 artists who generated over $10k on Spotify in 2022 were DIY acts, releasing music via distributors like DistroKid, TuneCore, CD Baby, and others.
How many DIY artists is that, more precisely?
We don’t have to guess: On Loud and Clear’s latest update, Spotify tells us that “14,700+” DIY artists generated over $10k across recorded music and publishing royalties on the service in 2022 (see below).
Taking Spotify at its word (and assuming that, had that 14,700 number been, say, 50 or 100 artists bigger, Spotify would have cited a higher figure) this means that DIY artists comprised approximately 25.8% of the subset of 57,000 artists who generated $10k+ on Spotify in 2022.
How does that compare to 2021? The answer is pretty surprising.
Because Spotify’s previous Loud & Clear update (see below) informed us that 15,140 DIY artists generated over $10k on Spotify in 2021.
That’s bigger, not smaller, than 2022’s equivalent figure (14,700)
So, to walk you through those numbers one more time:
- Approximately 14,700 DIY artists generated more than $10k in royalties on Spotify in 2022;
- That’s a decline of 440 vs. the 15,140 DIY acts that Spotify tells us surpassed the same $10k earnings threshold in 2021;
- Yet the total number of artists who generated over $10k on Spotify grew YoY by +4,400 in 2022 vs. 2021 (57k vs. 52.6k);
This can only mean one thing: Non-DIY artists, aka artists signed to major and independent record companies, pinched market share – in this context – from DIY acts on Spotify in 2022 (see below).
These figures are startling for a number of reasons, not least the fact that the overall number of DIY artists on Spotify continues to blow up.
On Spotify’s previous Loud & Clear update, we learned that there were approximately 8 million artists with music on Spotify at the close of 2021. (That’s music artists, not including podcasters.)
In the newly-updated Loud & Clear, we learn that there were approximately 9 million artists with music on Spotify at the close of 2022.
In other words, the total number of artists with music on Spotify is now growing by around a million acts annually.
Meanwhile, DistroKid claims to distribute 30-40% of all new music releases today, and says that it works with over 2 million artists.
That’s just one DIY service, not including TuneCore, CD Baby etc.
It’s a fair guess, therefore, that DistroKid distributed around a third of a million DIY artists who uploaded music to Spotify for the first time in 2022.
And yet, to reiterate, the number of DIY acts amongst the constituency of artists generating over $10k annually on Spotify actually declined last year.
Another important bit of context: Spotify’s own end-of-year report tells us that music distributed by the three major record companies – combined with music distributed by members of indie group Merlin – is losing overall market share.
According to this data, 75% of all plays of music on Spotify in 2022 were of tracks distributed by the majors or Merlin members (see below).
That means a quarter of all streams on Spotify in 2022 were of music created outside of this group – largely by DIY acts – and distributed by non-major/Merlin companies including – them again – TuneCore (and its parent Believe), plus CD Baby, and DistroKid.
(Important note: MBW has confirmed with Spotify that, in terms of the below data, DistroKid is not counted within Merlin’s numbers, despite being a Merlin member. It is instead counted as a non-Merlin/non-major entity.)
Last week, another interesting set of contextual information about the recent explosion in DIY acts on streaming services emerged.
According to a new annual report by Midia Research, self-releasing/DIY artists, collectively, generated more money than ever before in terms of worldwide recorded music revenues in 2022.
Midia estimates that DIY acts (using services such as DistroKid, TuneCore, and CD Baby) generated USD $1.78 billion in recorded music revenues last year.
That figure was up 16.6% YoY and was enough to claim a 5.7% global market share of all revenue generated by the record business.
The big question raised by these stats isn’t how lucrative the DIY artist sector is becoming, because, taken as a whole, it’s clearly very lucrative indeed.
The big question is how thinly spread the spoils of this lucrative sector have become for individual DIY artists.
One last time: the total number of artists generating over $10k from recorded music plus publishing royalties on Spotify went up in 2022 (+4,400 YoY). But the number of $10k+ earners who were DIY artists went down (-440 YoY).
Yet we know that multiple millions of the nine million artists with music on Spotify today are DIY/self-uploading acts:
- DistroKid says it has over 2 million artists on its books;
- CD Baby says it has over 1 million;
- TuneCore, plus Believe, just confirmed to investors that they shared 1.3 million artists as of the end of 2022.
Obviously, with vast scale like this – and with many DIY artists having no hope of operating even semi-professionally – it’s useful to qualify these figures at a more granular level.
Handily, Loud & Clear helps us to do so.
The Premier League of DIY acts: Over 10k monthly listeners
According to the latest edition of Loud & Clear, in 2022, there were 94,000 DIY artists on Spotify who attracted over 10,000 monthly listeners each on the platform.
The average annual royal sum generated by these 94,000 artists in 2022 – across recorded music and publishing – was $12,200.
In 2021, according to Loud & Clear, there were fewer DIY artists on Spotify that boasted over 10,000 monthly listeners on the platform: 72,700.
However, the average amount of royalties these 72,000 DIY acts generated that year was higher ($15,100) than the equivalent group in 2022.
(The average monthly listener count of 2021’s group, at 117,812, was also higher than 2022’s set, at 109,800 – see below).
All of these figures point to something empirical, and inevitable: The dream of being a popular DIY artist who earns a living from Spotify is getting less, not more, likely.
DIY artists with significant audiences today aren’t just competing with acts signed to record companies for Spotify’s streaming royalty payouts. They’re also competing, increasingly so, with each other.
Remember: 94,000 DIY artists achieved an audience of over 10,000 monthly listeners on Spotify in 2022. No easy feat.
Yet just 14,700 of this group – less than one in six of them – generated more than $10k on the platform last year.
The dawn of the Spotify era brought with it new promise for the independent artist community.
Gone were the days of the gate-kept music industry; an era of true democracy would now be unleashed, where any artist could build a lucrative fanbase, and share in the spoils of the streaming revolution.
What perhaps wasn’t communicated so readily: Hitting the milestone of attracting 10,000+ fans to your work each month probably won’t be sufficient for you to start generating even $10k a year from Spotify.
In fact, judging by 2022’s figures, the likelihood of you being able to generate $10k a year as a DIY artist on Spotify isn’t increasing as time goes on – it’s actually getting smaller.
MBW’s podcasts are supported by Voly Music. Voly’s platform enables music industry professionals from all sectors to manage a tour’s budgets, forecasts, track expenses, approve invoices and make payments 24/7, 365 days a year. For more information and to sign up to a free trial of the platform, visit VolyMusic.com.
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