Image credit: Loudandclear

Spotify is aiming to give its users more transparency to as how their royalty payment system operates.

The conversation around fair payment to artists from streaming has been in constant rotation for the last few years. As the conversation grew it became incredibly clear that how Spotify’s streaming royalties are paid out is incredibly complex. There are an overwhelming amount of factors that add up differently for each artist. 

After an outcry from business heads, fans and musicians Spotify has made a welcome step in clarifying the payment system by launching ‘Loud and Clear’, a straightforward explanation of the payment system and how it works. 

The site is full of information but do not expect to see a breakdown of the financial gains of each artist, in fact, there are no artists mentioned by name throughout the site. Instead the website “aims to increase transparency by sharing new data on the global streaming economy and breaking down the royalty system, the players, and the process.”

The site is jam-packed with all the information you could require as well as FAQs, and a really informative video called “How The Money Flows”. 

There are two things that are immediately made clear and they are: 

  • There is no single, uniform among paid per stream to every artist. It is based on a wide variety of facts that are unique to each artist. So, for example, if you hear an artist saying they made X millions from X amount of streams, that figure is unique to them, no one else. 
  • Spotify does NOT pay the artists directly. Spotify pays the rights holder, the entity that won the rights to the music. It’s the rights holder that determines how much the Spotify streaming revenue generated by the artist’s catalog is distributed. Rightsholders come into the forms of labels, producers, collaborators, managers, distributors, etc.) Spotify is unable to clarify how much money each artist has gained from streaming royalties simply because it does not know.

Speaking on the long-awaited clarification Spotify’s head of marketplace Charlie Helman said: 

“We talk about these things internally constantly, but externally I think we’ve been too quiet,” he tells Variety. “Artists deserve more clarity about how the streaming economy is working. Obviously, it’s not simple: it’s a complicated ecosystem and Spotify is just one piece of it. As of 2019, we represent 20% of the recorded-music industry. But we want to do our part to be more transparent with the data we have about artists achieving levels of success. We’re all hearing that the industry is experiencing incredible growth: who’s benefiting? Hopefully, this gives some answers.”

Watch the video by Loud and Clear here: