Decode: Spotify’s $10BN payout

Exclusive analysis for The Radio Edit’s paid subscribers.

For an update in the light of Spotify’s published results, read the next article HERE.

What better way to start the weekend than a read-through of dry analysis?

I’ve been delighted to see a number of readers take a paid subscription, and this is the first piece of exclusive content for those subscribers, a new article series called Decode. First up, I look at Spotify’s news release this week that claimed industry payouts for 2024 exceed $10BN for the first time. The aim for the series is to analyse pieces of information from music and tech businesses when they’re delivered, either to surface up insights that aren’t immediately obvious or to do some number-crunching to see if we can get below the surface.

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A couple of days ago Spotify issued a press release authored by their VP for Music Business, David Kaefer.

“In 2014…Spotify’s annual contribution [to the music industry] was around $1 billion, with around 15 million paying subscribers. In 2024, Spotify alone paid out a record $10 billion to the music industry”.

Payouts to the music industry means Spotify’s music licensing costs. The fact a slice of one of the company’s accounting line-items – their cost of revenues expense – is revealed here as $10BN – is notable, given that we haven’t had Spotify’s Q4 results yet, nor their annual statement for 2024. It’s possible they’re trying to get momentum behind a particular narrative ahead of the full results being published.