Spotify paid  billion to music rights holders by 2023 – equivalent to 63% of its annual revenue

Spotify paid $9 billion to music rights holders by 2023 – equivalent to 63% of its annual revenue

“Right now, the CEO of TikTok is probably sitting at home watching this show, eating ice cream, crying, watching all his exes in one room. And you know what, TikTok? Shame on you. Shame on you for removing all these artists. How dare you do that? [Pause] That’s Spotify’s job.”

Daniel Ek probably enjoyed it Trevor Noah The opening monologue focused on TikTok in the The Grammys on Sunday more than most… until Spotify became the punch line.

In what we’re sure is a random announcement, Spotify confirmed today (February 8) the amount of money it paid out to music rights holders in 2023 – and it’s big.

The company says it has delivered 9 billion dollars last year for recipients across record companies and music publishers, plus independent distributors, performing rights organizations and collecting societies.

According to Spotify, 9 billion dollars the figure means its annual payments to music rights holders have “nearly tripled in the past six years”.

As of the close of 2023, Spotify says, it was paid 48 billion dollars in registration and publication of royalties since establishment in 2008.

Spotify’s 9 billion dollars The payment figure means that music rights holders were paid approx 750 million dollars on average every month in 2023 – approx 173 million dollars Every week.

Earlier THIS week, Spotify published its annual revenue results for 2023, revealing that it has generated 13.247 billion euros in the 12 months to the end of December. Which converts to 14.336 billion dollars with the annual average EUR-USD exchange rate according to the IRS.

With this income figure in mind, a payment of 9 billion dollars in 2023 means that Spotify has paid approx 62.8% of its annual revenue for the music industry last year.

now, TIK Tok IS NO a music streaming service in the same style as Spotify. For one thing – currently – TIK Tok users can play music on the video platform only in increments of up to 60 seconds.

(TIK Tok operates a separate dedicated subscription music streaming service, TikTok musicbut currently only available in five territories.)

However, with Trevor Noah comments that still ring in the ears of the music business, it’s probably worth noting that we now have one approximate the idea of ​​how much money TIK Tok delivered to music rights holders in 2023.

Last week, as you know, Universal Music Group announced publicly that it had not reached an agreement to renew its licensing terms with TIK Tokciting policies around AI, platform security and TikTok’s compensation for artists as the reason behind the dispute.

In making that announcement – ​​which has since led to the removal of UMG Recorded Music BY TikTok Library – Universal stated in an open letter that “TikTok only accounts for approx 1% from our total income”.

As MBW calculated in this analysis, UMG’s “1%” comment suggests that TikTok paid Universal Music Group somewhere around 110 million dollars last year. (UMG’s total revenue in 2023 – with the fourth quarter still to be confirmed – is likely to fall to around 11.5 billion dollarsaccording to MBW predictions.)

This, in turn, means an annual payment to the total music industry of TIK Tok last year approx 350-400 million dollarsjudging by UMG’s typical global market share in all recorded music and music publishing.

However, we repeat: TIK Tok (as in, major platform TikTok) is seen as one social media platform (albeit music-led) by rights holders like Universal Music Grouprather than a music streaming service – so a direct apples-to-apples comparison with Spotify it doesn’t seem right here.

That said, we’re sure it won’t stop Daniel Ek from people remembering that his firm paid music rights holders around 24 times more than TikTok in 2023. (Ek’s first text today: Trevor Noah?)

A fairer comparison for Spotify to do? How much does it pay music rights holders versus what? YouTube/YouTube Music pays them.

The last figure we have from to YouTube at that point it’s “over $6 billion” that the Alphabet platform says it paid music rights holders in the 12 months between July 2021 and June 2022.

CEO of Spotify Daniel Ek was asked on Spotify’s earnings call on Tuesday from Mature honest of BofA Securities regarding the implications of UMG’s dispute with TikTok from a competitive perspective.

Ek said: “I’m not going to comment on any kind of competitive dynamic, but what I can say is that we feel very good about our relationship with our musical partners. It’s probably the best it’s ever been.”

Credit: US Girl / Alamy

“I feel very good where we are with our musical partners. I feel good about the value we are bringing to the music industry.”

Daniel Ek, speaking to Analysts on SPOT’s Q4 earnings call

He added: “I feel really good about where we are with our musical partners. I feel good about the value we are bringing to the music industry. And I think that’s being widely recognized.

Spotify said today it will reveal more about its 2023 royalty payments in the company’s annual Loud & Clear report, which it says will be updated in the coming weeks.The worldwide music business

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