In 2014, the music industry reached a low point when global recorded music revenues hit $13billion. Spotify’s annual contribution at the time was around $1billion, with around 15 million paying subscribers.
In 2024, Spotify alone paid out a record $10billion to the music industry - totalling nearly $60billion since its founding. For a lot of people, those numbers might go in one ear and out the other, and they’d perhaps ask why Spotify keeps shouting about it. Spotify says it’s because the system is working.
Today, there are more than 500 million paying listeners across all music streaming services. A world with 1 billion paying listeners is a realistic goal it aims to collectively set.
There’s a vibrant marketplace of streaming services for different types of consumers, each doing its part to normalise the behaviour of paying for music streaming. It’s been a collective effort. But Spotify claims there are a few things specific to its platform that not only make it the most popular subscription streaming service, but also the highest paying.
Retention is priority number one, which it says is driven by personalisation, curation and product innovation. Reportedly, Spotify fans enjoy the recommendations, the expert editorial curation, and surprise-and-delight moments like AI DJ, daylist, and Wrapped, as well as the access to non-music content. Spotify indicated that this is why its users keep coming back, discovering more new artists, and retaining their subscriptions.
“I recently read a data point from economist Will Page, that said more music is released in a single day than there was in the entirety of 1989,” explained David Kaefer, VP of music business at Spotify. “In the pre-streaming era, you were either in the club or not. If you didn’t have a label deal or the means to distribute your music worldwide, you weren’t one of the few thousand artists on shelves at a record store or one of the 40 in rotation on a radio station.”