Spotify Has Paid Out $40 Billion to the Music Industry – So Why Is No One Happy? | PRO Insight

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Maybe the industry should take a closer look at Apple, which set the rules of the game for digital music two decades ago

Spotify logo against sunset
Spotify faces challenges to profitability. (Getty Images)

Spotify recently trumpeted that it has paid out nearly $40 billion to music rights holders since its launch in 2006, an impressive-sounding number. But few in the industry were impressed. Artists certainly weren’t. 

In its most recent earnings report, the music streaming leader celebrated its $3.4 billion in fourth-quarter 2022 revenue and 205 million paid subscribers, representing a free-to-paid subscriber conversion rate of 42% that’s the envy of the entertainment business. That didn’t please investors, either. Spotify’s stock price is about a third of what it was just two years ago.

Essentially no one is happy, and here’s why. Spotify’s dirty little secret is that it’s saddled with a business model that makes it improbable artists will see significant pay and practically impossible for Spotify to be profitable.