Music Moves

March 20, 2025

Will Artists Eventually Make More Money From Platforms?

It’s that time of year again when companies start announcing how much they’ve paid out to creators. YouTube claims they’ve paid creators $107B (2021-2024), Roblox says they paid out $1B to developers in 2024, and now Spotify is reporting a record $10B in royalties paid to the music industry last year. One key phrase that stood out to me was Spotify’s wording—“paid out to the music industry.” That could obviously mean a lot of things, so let’s dig in.

Source: Spotify

While I think it's great that platforms are all starting to announce how much they've paid out to creators, artists, developers, etc., I do think there should be a little clarity on who's actually receiving the payouts.

Payments Aren’t All Created Equal

I think one core distinction between how Spotify is paying out their royalties and how YouTube is paying is that when YouTube says they’re paying out 55% to creators, in the majority of cases, it’s directly to the creator of the content. There are some exceptions, and I’m sure we all remember the Multi-Channel Network (MCN) days when they tried to act as the label between YouTube and the creator. Thankfully, creators can now sign up directly with the YouTube Partner Program (YPP), and all of the advertising payments go directly to them.

In case you need a refresher on joining the YPP

In the music industry, labels still act as the rights holders and payment collectors for the platforms. How those royalties get distributed depends on each artist's deal with their label, but in most cases, the artist receives only a fraction of the net payment.

What Does The Future Look Like?

Will this change over the next 5-10 years? Almost certainly, in my opinion. Time will tell how this evolves and what new platforms emerge that allow artists to upload music and get discovered. More than ever, we’re seeing artists independently distribute their music through digital service providers (DSPs) like Spotify and Apple Music, and I believe we’ll continue moving in that direction. Music discovery is vastly different than it was a decade ago, thanks to TikTok and other social platforms. Artists need to keep figuring out how to leverage the internet to distribute their music.

For the record, I don’t think labels are going anywhere anytime soon—they still provide value to artists in many ways. They’ve also done an incredible job discovering talent and helping artists grow their careers. No one can predict what the next few years will look like for the music industry, but one thing is certain: the internet continues to reshape music distribution and marketing, and that’s not slowing down anytime soon.

The Big Takeaway…

It’s that time of year when platforms are reporting how much they’ve paid artists and creators. However, not all payments are created equal—YouTube pays 55% directly to creators, while Spotify pays out to artists and music labels. With how music discoverability works today, I believe more artists will continue uploading directly to DSPs, and some will choose to remain completely independent.

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