👉 Background: Back in the early 2000's, file sharing applications like Napster, Kazaa, Limewire became all the rage. And despite being illegal, you knew you'd either get the song you wanted, get a rip-off of the song… or a virus. Then, in 2006, Spotify became the OG legal streaming platform for music.

‍👉 What happened: Since then, it has grown to 675 million users and 263 million paid subscribers. Now, Spotify has announced it paid $10 billion USD in royalties in 2024 to the music industry — and that’s a wooooooorld record!

‍👉 What else: Nearly 1,500 artists earned over $1 million USD in royalties from Spotify last year, and that’s a pretty big jump from its payouts a decade ago, which were just $1 billion USD. But, that still hasn’t stopped many in the music industry believing that they’re still being short-changed by Spotify and co.

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‍What's the key learning?

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‍💡The streaming economy has revolutionised how artists make money—but it’s also led to big debates about fair compensation.

💡In the old days, artists made money through album sales and radio plays. Now, music streaming is the main revenue source — but the per-stream payout is tiny. For context, Spotify pays artists around $0.003 to $0.005 per stream. And that means an artist needs around 250,000+ streams just to make $1,000.

💡While some artists, especially the biggest names, earn millions, there are more than 8 million artists on Spotify. So that means the smaller artists struggle to break even.