Spotify paid out a record $11 billion to the music industry in 2025, the largest annual payment from any retailer in history and up more than 10% from $10 billion in 2024, according to the company's latest Loud & Clear report released this week.
More than 13,800 artists earned at least $100,000 from Spotify royalties alone last year—nearly 1,400 more than the prior year—while over 1,500 artists surpassed $1 million. Independent artists and labels accounted for about half of all payments.
The Los Angeles Times reports Spotify positions itself as a growth engine for the industry, with the royalty pool expanding over 10% annually. Features like personalized playlists (Discover Weekly, daylist) and editorial ones (Fresh Finds, RapCaviar) help users discover new music, with the average Premium subscriber listening to 200 artists monthly—nearly half discovered for the first time.
The company highlights streaming's role in providing global access and opportunity, especially for indie artists. Over a third of those earning $10,000+ last year started by self-releasing via independent distributors. Spotify pays rights holders (labels, distributors, publishers, etc.) based on "streamshare"—an artist's proportion of total streams—rather than a fixed per-stream rate. It does not pay artists or songwriters directly.
Critics, including Damon Krukowski of United Musicians & Allied Workers (UMAW), argue that payments flow mainly to labels and distributors, not directly to recording artists. Many independents use services like DistroKid (which charges fees but lets users keep 100% of earnings after) to upload music.
UMAW, representing over 70,000 musicians, helped draft the Living Wage for Musicians Act, reintroduced in the U.S. House in fall 2025. The bill proposes a new streaming royalty fund for direct artist payments of at least one penny per stream. It remains in committee with no further action as of early 2026.
A decade ago, the industry faced rampant piracy, declining CD sales, and criticism of low streaming royalties. Spotify executives note those early concerns were valid but argue the model has scaled successfully, creating more career artists globally—including many non-household names earning six or seven figures.