Independent music generated $4.5bn on Spotify in 2023

This means that some $4.5bn was awarded to self-releasing artists or those signed to non-major labels. This is a four-fold increase of what indies generated on Spotify in 2017, and the highest amount ever generated from a single retailer in one year

According to International Federation of the Phonographic Industry data, this is more than the entire recorded music industry in every country except the US.

At the start of the year, Spotify announced it had paid $48bn since its founding in 2008, saying that it pays out nearly 70% of every dollar it generates from music back to the industry.

Spotify generates its music revenue from its Premium subscribers and fees from advertisements via its Free tier, and with some 236 million paying subscribers, it remains by far the world’s largest paid music streaming service. The US is its biggest territory.

The money that reaches artists is determined by the rightsholders, not Spotify. Payments first go to the rightsholders, which take their fee or percentage and then pay the creators their share. Rightsholders include record labels, publishers and independent distributors, among others.

According to industry watchers, streaming has therefore empowered independent artists by “levelling the playing field to enable them to access the same global audience and tools as the superstars.”

Spotify’s announcement comes after the revelation that music licensed to it by the three big majors (Universal, Sony and Warner) plus indie licensing agency Merlin accounted for about 74% of its streams in 2023.

The other 26% came from independent DIY artists and independent labels that license directly rather than through Merlin. This proportion has grown steadily in recent years from 15% in 2018. Spotify also noted that it accounted for “more than 20% of global recorded music revenues.”