How much do musicians make? Spotify is loud but not clear: 90 percent of 'professional' artists don't make a living wage.
Economic realities are missing from Spotify's Loud & Clear site, but at least they're making an effort to be transparent about how much musicians make.
It’s not mission impossible if there’s another exit.
They say we’re hardest on the ones we love, and that’s because we hold them to a higher standard. That might explain, at least in part, why Spotify tends to take the heat for problems plaguing the music industry, most of which they didn’t create. But that doesn’t mean they can’t strive to meet the standards they’ve ostensibly set for themselves—even if no one else is.
Part of Spotify’s mission, according to their Newsroom site, is to give 1 million artists a chance to sustain themselves off of their creative careers.
Our mission is to unlock the potential of human creativity—by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it.
— Spotify’s mission statement
Important to note here is the word “opportunity,” which suggests that Spotify’s mission is not to generate economic stability for 1 million artists but to create a marketplace for 1 million artists to strive for survival. Considering there are some 9.2 million artists and who-knows-how-many podcasters on the platform and counting, they have presumably already done that.
Even so, let’s assume Spotify does want 1 million artists to find economic stability. Their 2021 rollout of the Loud & Clear website would seem to indicate a desire to publicly track their progress toward that goal, which is admirable, but it also raises some important questions about the feasibility of making it as an artist today.
The economic reality for 9 million starving artists.
To really get a sense of what it means for artists “to live off their art,” let’s establish what a living wage actually means for the average person in the United States1.
MIT’s living wage estimate for one working adult without children in the US—and let’s assume, for simplicity’s sake, that the majority of musicians fall into this category—is somewhere between $30,000 and $40,000 a year. For major metropolises like New York City, it’s closer to $50,000 a year, which is about what entry-level positions in the music industry pay, by the way.
According to the 2021 United States Census, the median non-family household income was $41,797 a year, which comes out to roughly $20 an hour. Fortunately, that’s slightly higher than the living wage estimate for the US; unfortunately, that means that almost half of single working adults is surviving off of less than a living wage. And it certainly doesn’t help that the minimum wage in the US is closer to a poverty wage than to a living wage.
I was raised in one of these single parent households that fell closer to the poverty wage than the living wage. In my 20s, I found myself in the same position—yes, even after getting one of those highly coveted degrees, with Honors, from Stanford. I can assure you that not having health insurance and sweating every week for fear of maxing out your $40 for groceries exacts a terrible toll on your mental and physical health.
When you throw the stresses of music and business into the mix, you get the experience of most artists today. While these economic realities are largely absent from Spotify’s Loud & Clear site, we can still use the data provided there to examine how hard it actually is to make a living from streaming.
Spotify is only focused on the 200,000 artists with 10+ tracks and 10,000+ monthly listeners.
For the first time in history, we actually have some data behind how many artists exist in the world, however biased toward Western, online society the sample may be. To date, there are about 9.2 million artists on Spotify, which is slightly more than the entire population of London.
Spotify makes it clear, however, that they’re really only concerned with a subset of those artists, and that subset—roughly 200,000—is significantly less than the 1 million artists mentioned in their mission statement.
There are 213,000 artists who have released at least ten songs all-time (meaning they have a body of work to earn from) and average at least 10,000 monthly listeners (meaning they have been able to attract the beginning of an audience)…. While many often cite the nine million people who have uploaded any music to Spotify, when it comes to building financial opportunities, we’re focused on these 200,000 professional and professionally aspiring artists.
— Spotify’s Loud & Clear site
In other words, Spotify is only interested in building financial opportunities for 2 percent of the artists on its platform. Given Spotify’s mission, you would think that at least 2 percent of artists—even if it is 1/5th of the assumed goal—would be able to “live off their art.” Let’s see….
According to Loud & Clear data, more than 90 percent of Spotify’s “professional” artists made less than a living wage in 2022. In other words, only 17,800—less than 10 percent—out of roughly 200,000 ”professional” artists made enough on Spotify to live off of. Meanwhile, 66 percent of Spotify’s “professional” artists made only $1,000-$5,000.
As Spotify suggest on their Loud & Clear site, artists make money on other streaming platforms and through other revenue streams like merch and live shows. That’s totally valid, but it’s also the case that the income that Spotify is reporting for artists is not actually the income received by artists.
Nearly 70% of that revenue is paid back as royalties to rights holders, who then pay the artists and songwriters, based on the agreed terms. These rights holders include record labels, publishers, independent distributors, performance rights organizations, and collecting societies. Spotify does not pay artists or songwriters directly.
— Spotify’s Loud & Clear site
The money that artists actually see depends on their label and distributor deals.2 These deals are private and variable, and royalty breakdowns are beyond the scope of this piece, but a lot of labels today will take 50 percent.
To dramatically oversimplify royalty splits, that means an artist that generates $50,000-$100,000 on Spotify might only see $25,000-$50,000. So really, the number of artists actually making a living wage on Spotify is likely closer to 10,000, or 5 percent of “professional” artists.
9 million artists don’t fall into Spotify’s ‘professional’ class.
It’s true that with lowered barriers to entry, you get a lot of music hobbyists who distribute a couple of tracks to Spotify and forget about them. It’s also true that you have a lot of exceptionally talented musicians who make really good music that goes unappreciated. These days, I would probably consider myself in the former camp, but most of the artists I know fall into the latter.
Believe it or not, a lot of artists get into music because they love music—not social media and self-promotion. In my experience, these artists are the most talented of the bunch. As such, I actually think it is fair to spotlight the 9 million artists for which Spotify is not “building financial opportunities.”
According to Loud & Clear data, almost 98 percent of artists on Spotify made less than $1,000, and less than 1/10th of a percent of all 9.2 million Spotify artists made a living wage in 2022.
It’s difficult to see how Spotify is making progress toward their mission if they’re only building financial opportunities for 2 percent of their artists and actually delivering on those opportunities for 1/10th of a percent. But that’s where that word “opportunity” rears its head again.
Even if a fraction of 1 million artists aren’t actually making a living wage through Spotify, streaming might be an important marketing driver for other revenue streams that do afford those artists the ability to live off their art—and that would still allow Spotify to claim “mission accomplished.”3
Spotify may have broken down barriers to rabid consumption more than a decade ago, but the barriers to institutional capital weren’t ever going to budge—and that’s not necessarily streaming’s fault.
The fact of the matter is this: Being an artist is hard. It always has been, and it always will be. We can lay the blame on systems and institutions all we want—and rightfully so, in most cases—but at the risk of romanticizing hardship, the struggle is also part of the beauty.
Information is abundant, and time is not—but that doesn’t mean we should only see the trees. The proliferation of information should help us see the forest.
Economic realities for artists may vary widely in different countries, but the US—at least for now—is still the No. 1 music market in the world. While it’s certainly a skewed sample of wage economics, Spotify itself is biased toward the US, so it’s not totally unreasonable to draw some global conclusions from US-based data.
The majority of artists who generate living wage-level revenue on Spotify have likely attracted the attention of labels. It’s difficult to prove this definitively, because label deals are confidential business agreements, but I think it’s a pretty safe assumption.
Alternatively, if the total artist population continues to balloon, and the share of artists making a living wage through streaming stays constant, then Spotify could theoretically reach the threshold of “1 million artists living off of their art” with an artist pool of about 1 billion. That’s an eighth of the world’s population.