And many of them don’t even have a chart-topping hit.
Spotify’s latest Annual Music Economics Report reveals that over a thousand artists earned over a million dollars from the platform last year. Released in March 2024, this report shows the financial growth of more relatively unknown artists due to bigger royalty pools and more diverse listener tastes.
Spotify’s New Millionaires
Last year, over 1,250 artists earned upwards of US$1 million each on Spotify.
The platform refers to these artists as “Unexpected Millionaires”. This is because 80% of these million-earning artists never made it into Spotify’s Top 50 Daily Global Songs chart. In fact, most of them even only started their careers after 2010.
As the platform claims, this change signals the diversifying tastes of Spotify listeners, opening the door for a more varied group of artists to thrive financially. And with Spotify’s royalty pool now over US$9 billion, there’s more revenue to go around.
Spotify’s reported numbers demonstrate exponential growth across the board for artists. For instance, artists earning over US$1 million increased by 18%, from 1,060 in 2022 to 1,250.
This growth wasn’t limited to the millionaires club, as there was also a notable rise in artists earning US$10,000 and US$100,000.
A Diverse Success Story for ‘Outlier’ Artists
Billboard’s analysis of Luminate’s top 1,000 U.S. artists reveals a mixed group of artists who surpassed the one million USD mark.
Among them are legendary bands and musicians like Fleetwood Mac, Elton John, The Beatles, Queen, Bob Marley, 2Pac, and Prince. But, the list also included newer talents like Jelly Roll, The Neighbourhood, and PinkPantheress, who have found success through streaming and ranked above #150 on the list.
The platform also reveals that the global reach of streaming platforms is a huge factor behind this diversity and growth. This allows artists to reach more fans worldwide.
More than half of the 66,000 artists who earned at least US$10,000 from Spotify royalties in 2023 come from countries where English isn’t the primary language.
“Artists who—in the past—might have struggled to break through are now finding their audiences, and the music industry today is a more diverse and accurate reflection of the world we live in.” says Spotify.
“Spanish, German, Portuguese, French, and Korean lead the pack for performance in languages other than English – while Hindi, Indonesian, Punjabi, Tamil, and Greek all saw huge upticks in 2023.”
Spotify’s Royalty Ecosystem
Spotify says artists can approach the million-dollar mark with around 4-5 million monthly listeners or 20-25 million streams.
However, rather than pay per stream, Spotify uses streamshare to calculate royalties. This means artists earn money based on their share of the total songs played on Spotify, a system that allows all kinds of artists to make good money from their music.
So, despite earning millions in royalties, artists don’t take home the entire amount themselves.
The earnings are split between music contributors such as producers, writers, and record labels depending on existing deals. Thus, the amount an artist receives can be much less than the initially reported payout.
For example. Snoop Dogg recently revealed that he only earned $45K after gaining one billion streams in one of his songs. This is because the song isn’t entirely owned by him but is shared by multiple artists and producers.
It’s also worth noting that some artists don’t receive their Spotify royalties directly because they’ve sold off their rights to investors.
More artists are now cashing in on their catalogs for upfront financial benefits, thus changing how revenues are earned from platforms like Spotify.