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Spotify CEO claps back against claims of underpaying artists
Published onMarch 14, 2025
- Amidst musician protests, Spotify CEO Daniel Ek has put out a statement defending their artist payout system.
- Spotify says it paid out $10B to the music industry in 2024, a 10x increase from 2014.
- Spotify reported a record 1.14 billion Euros in net income in 2024.
Do you think Spotify pays its artists fairly? CEO Daniel Ek thinks so, putting out a statement on X this week defending the Spotify payout system.
The impact of Spotify on the music industry has been a point of contention for years, with extensive criticism on its revenue payout system. Spotify pays royalties based on an artist’s “market share,” meaning their earnings depend on how many streams their songs receive compared to the total streams across the platform. Many artists have spoken out against the payment system or even temporarily boycotted the platform, including Taylor Swift and Thom Yorke. Others have taken to the streets in recent years to protest Spotify in the hopes of earning a living wage. We recently covered the news that Spotify is stuffing their playlists with ghost artists to avoid large artists payouts, paving the way for AI to replace the need for artists in many of their most popular playlists.
In his statement, CEO Daniel Ek clarified that Spotify doesn’t pay artists or songwriters directly, but instead pays out the rights holders of the music (typically the record label or publisher). Ek says that the company pays out more than other retailer or music streaming service, which makes sense considering Spotify now has over 675 million users, and 263 million paid subscribers.
According to Ek, Spotify pays out roughly two-thirds of every dollar generated from music back to rights holders. He appeared to pass blame onto the rights holders, saying “it’s always unfortunate and frankly disappointing to hear stories where the majority of those payments don’t make it through to an artist or songwriter”. He also advocated for Spotify having a positive impact on independent musicians, saying “50% of the $10B we paid out was generated by DIY artists and artists signed to independent record labels. Especially from a historic standpoint, that is insane and was NOT happening in the pre-streaming era.”
You can learn more about how Spotify has paid out artists on their Loud & Clear website, where the company touts the $10B it paid out to music rights holders in 2024. The company says it is “on a mission to get the world to value music again”. Spotify and its shareholders are certainly enjoying the fruits of said value increase, reporting record 1.14 billion Euros in net income in 2024, while their stock price has experienced over 5X growth since 2022.