Spotify's $11 Billion Payout to Music Industry in 2025
Spotify announced it paid over $11 billion to the music industry in 2025, marking a $1 billion increase from the previous year. The streaming giant states this figure accounts for approximately 30 percent of the recording industry's total revenue.
Understanding the Payouts
This $11 billion figure specifically covers royalties to the music industry and excludes revenue from merchandise, ticket sales, audiobook royalties, and podcasting deals.
The payout went to "rightsholders," which include labels, distributors, and publishers, rather than directly to individual musicians and artists.
Artist Share Remains Opaque
Spotify indicates it does not track the specific portion of these funds reaching artists. Artist agreements vary significantly:
- Artists on major labels may receive as little as 15 percent of their royalties.
- Indie labels often offer 50 percent or more.
Focus on the Independent Sector
Approximately half of the royalties were paid to independent artists and labels, encompassing self-releasing acts and those signed to independent labels. This category also includes library content and "ghost artists." Chris Macowski, Spotify’s Global Head of Music Communications, stated the company lacks more detailed breakdown data for independent act payouts.
Top Earners and Industry Comparison
Macowski reported that over 12,500 artists generated more than $100,000 in royalties in 2024, an increase from 11,600 in 2023. Spotify asserts this figure exceeds the number of artists stocked in record stores during the peak CD era, citing a 1994 article indicating major record stores carried about 10,000 records and CDs.
The Mechanics of Royalties
Royalty payments per stream decrease as the total number of streamed songs increases, due to a finite money pool.
To increase this pool, Spotify would need to either expand its subscriber base or raise prices, unless it reduces its 30 percent share of proceeds. Artists with under 1,000 streams currently receive no payout.
Addressing Criticisms and Future Plans
In its announcement, Spotify also outlined future plans to address criticisms. These include "new solutions" for scams, artist impersonation, and spam content, alongside changes to artist verification processes.
The company acknowledged the exploitation of AI by "bad actors" to generate low-quality content and divert revenue.
Spotify also plans to incorporate more human curation into the listening experience, in response to feedback regarding algorithmic reliance.