Spotify once had a reputation for underpaying music artists. It hopes to change that perception

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Back in the early 2010s, the music industry was at a low point.

Illegal downloading was widespread, and CD sales were falling. Meanwhile, early music streaming services like Spotify were criticized by artists for not paying enough in royalties.

Spotify has become the leading audio streaming service worldwide and now pays out more to the music industry than any other company – exceeding $11 billion last year. According to Spotify, these payments aren’t just going to famous musicians; around half of the royalties go to independent artists and labels.

Ten years ago, it was reasonable to question whether Spotify could succeed financially and whether the streaming model itself would work long-term. People needed to see if Spotify could grow into a sustainable business,” explained Sam Duboff, Spotify’s head of global marketing and music policy.

Duboff explained that Spotify’s payments to artists aren’t leveling off – they’re actually increasing by over 10% each year. He believes this growth is due to Spotify successfully encouraging people to pay for music again through personalized features and making it available worldwide.

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Spotify paid over $11 billion to artists and rights holders last year. As the service expands and subscription costs increase, they also intend to address the challenges posed by artificial intelligence.

Founded in 2006, the company reaches over 751 million people worldwide, with 290 million of those being paying subscribers. It operates in 184 countries.

According to Duboff, Spotify Premium subscribers listen to around 200 different artists each month, and almost half of those artists are new discoveries. He explained that creating a platform where people can easily find and enjoy music encourages them to subscribe to Premium and continue their membership.

The platform features many different playlists. Some are created by experts, like Fresh Finds which highlights rising artists, and RapCaviar, focused on new rap music. It also builds personalized playlists for each user, including Discover Weekly, a collection of new music released every week, and daily mixes tailored to their taste.

This platform sees itself as a launchpad for long-term careers for independent musicians. In fact, last year over a third of artists who earned $10,000 in royalties on the platform initially released their music independently, using services that help artists distribute their work.

At its core, streaming empowers artists and connects them with listeners worldwide. As Duboff explains, it allows musicians to release their work independently and immediately reach a global audience. When people have more choices, they’re more likely to explore new types of music and discover artists they might never have found otherwise.

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Okay, let’s talk Spotify’s latest numbers. As a streaming service, they absolutely crushed it in their final report for 2025. We’re talking a massive jump – a record-breaking 38 million new monthly listeners! That brings their total up to a staggering 751 million. Honestly, it’s the biggest single-quarter growth they’ve ever seen, and a really promising sign for the future of music streaming.

In 2025, almost 14,000 artists made over $100,000 just from Spotify. Spotify’s numbers also reveal a significant increase in earnings for artists: the artist ranked 100,000th in earnings made $7,300 last year, compared to around $350 in 2015.

The company, a major player in L.A.’s Arts District, highlights that more and more artists on their platform are earning substantial incomes – reaching into the millions of dollars. Just ten years ago, only the very top artist on Spotify made around $10 million in royalties. Now, the top 80 artists on the platform each earn over $10 million per year. Some of the biggest global artists in 2025 included Bad Bunny, Taylor Swift, and the Weeknd.

Spotify says artists who aren’t yet famous can make over $100,000, and last year, more than 1,500 artists earned a million dollars or more.

For some musicians, the outlook is not as clear

Damon Krukowski, who is both a musician and a representative for United Musicians & Allied Workers, points out that while Spotify generates revenue, that money often ends up with record labels instead of the artists themselves.

Artists who release music independently often use platforms like DistroKid and CD Baby to get their songs online. These services charge a small fee or take a percentage of the earnings. DistroKid, for instance, offers a basic plan for $24.99 per year and promises artists will keep all of their royalties.

According to Krukowski, Spotify doesn’t directly pay recording artists. He believes artists should receive direct payments from streaming services when their music is used.

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Spotify is growing its presence in Los Angeles, adding a new podcast studio in Hollywood to complement its Arts District campus. This new space will be the main hub for The Ringer, Spotify’s media company covering sports and pop culture.

A group representing over 70,000 musicians and music industry professionals recently helped create the Living Wage for Musicians Act. This bill, presented to Congress last fall, proposes a new system for streaming royalties that would guarantee artists at least one penny for every time their music is streamed.

Spotify explains on its Loud and Clear website that it doesn’t pay artists or songwriters themselves. Instead, it pays the companies representing them – like record labels, publishers, or organizations that collect royalties – as chosen by the artist or songwriter.

Unlike some services that pay artists a small amount for each stream, Spotify calculates payments based on an artist’s portion of all the streams on the platform – this is known as “streamshare.”

Unlike buying individual songs, streaming services like Spotify give fans access to everything for a monthly fee, not per song played. The company explained that artists and rights holders aren’t paid a set amount for each stream – that’s not how any major streaming service operates.

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2026-03-11 07:31