February 28, 2024

The Eye Of Africa

Nigerian artistes generated over N11 billion in revenue on Spotify in 2022

3 min read

In 2022, revenues generated by Nigerian artistes from Spotify alone reached over N11 billion, the music streaming platform announced Thursday.

This is according to information in its recently-launched annual report, Loud & Clear, aimed at increasing transparency in the music industry by sharing data on Spotify’s royalty payments and breaking down the global streaming economy, the players and the process.

While Nigerian music industry revenues overall have grown 63 per cent from 2021 to 2022 (according to IFPI), the music streaming platform said revenues generated by Nigerian artistes – from Spotify alone – grew 74 per cent over the same period.

It adds that the number of Nigerian artistes who generated more than N5 million and N10 million in royalties from Spotify alone has increased by nearly 25 per cent over the last year.

This figure, they said, represents revenue generated from Spotify independently and does not consider earnings from other services and recorded revenue streams, concert tickets or merch.

Spotify didn’t, however, reveal the details of the Nigerian artistes’ earnings.

Transparency, accountability

Spotify says its commitment is to ensure that African creators earn from their art by exposing them to 550 million active users on the platform, resulting in new audiences and more streams for the artists.

“Our commitment at Spotify is to ensure that professional musicians make a living from their work. Releasing the revenues generated by Nigerian artistes in 2022 on our platform is our way of keeping ourselves accountable and keeping true to our mission to enable artists to live off their art,” said Jocelyne Muhutu-Remy, Spotify’s Managing Director for Sub-Saharan Africa.

Over the past two years, Spotify said it paid more than $3 billion to publishing rights holders.

Publishing rights holders generated $3.5 billion from streaming overall in 2020, a sum that is more than publishing revenue from CDs and downloads in any year in the 21st century, even at the peak of the CD era.

Spotify pays rights holders monthly, but their app shows all-time streams rather than how many times a song was streamed this year or this month. Therefore, these all-time stream counts do not correlate with an artiste’s monthly payout from their rights holders.

How Spotify pays artistes

It’s important to know that Spotify does not pay artistes or songwriters directly. Instead, Spotify pays the rights holders. These are typically record labels, distributors, aggregators or collecting societies.

To this end, artistes and songwriters choose their rights holders and make agreements on their music, including permitting them to deliver it to Spotify.

In return, Spotify pays these rights holders, and they then pay the artistes and songwriters. Spotify has different agreements with each of these rights holders.

They said, ‘‘We generally pay them roughly two-thirds of every dollar we make from music. That includes money from listeners who pay for our Premium tier and advertisers on our free tier.

These royalties are paid out into two buckets to break it down even further: recording and publishing. Typically the recording payout is 75 to 80% of what Spotify owes to rights holders, while the publishing payout is 20 to 25 per cent.

How these payouts are divided depends on each rights holder’s

share of total streams on Spotify in each market worldwide.

Once that revenue leaves Spotify’s hands, how much an artiste or songwriter gets paid depends on their agreements with rights holders, and “everyone is different’’.

Spotify adds that they also don’t control how the money is divided by rights holders and paid to everyone who contributes to their work.

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