Spotify 2023 Royalty Payments in Mexico Reach US$300 Million

In response to criticism for lack of transparency regarding royalty management, Spotify, the global leader in music streaming, through its Loud&Clear annual earnings report, announced that in 2023, it paid more than US$9 billion in royalties globally, with more than MX$5.3 billion (US$317 million) going to Mexican artists. 

In 2021, Spotify was criticized by musicians and industry players for not paying fair rates and for its lack of transparency regarding royalty payments, as reported by the Los Angeles Times. Independent musicians, supported by the Musicians and Allied Workers Union, protested in Los Angeles, demanding higher payments for reproduction, as well as greater clarity regarding payment agreements and methods. Artists accused Spotify of benefiting major labels while independent artists receive "negligible" royalties. In addition, they pointed to the then-recent "promotional recording royalty rate" program, which reduced payments the higher the algorithmic visibility. 

Earlier in the year, Spotify was also singled out for its lack of transparency in audiobook royalty payments, according to several media reports. The UK Society of Authors (SoA) claimed that royalty settlements were "opaque" and that authors could not see the true impact of their income.

"Artists deserve clarity about the economics of music streaming," reads the Loud&Clear report. "This site aims to increase transparency by sharing new data on Spotify's royalty payments and breaking down the global streaming economy, the players, and the process."

In this context, the Loud&Clear report was created with the aim of providing greater transparency regarding royalty payments, emphasizing the benefits for both the company and the authors, revealing the role of Mexico within its ecosystem. 

According to the report, 60% of royalties paid in Mexico were generated by independent artists or independent labels, pointing to the importance of independent creators in the Mexican music ecosystem. In addition, this year marked a record in artist discovery, with more than 7.7 billion plays of Mexican musicians by new users on Spotify.

Another highlight of the report was the total sum of more than US$9 billion paid by Spotify in royalties globally, cementing its position as the single distributor with the highest annual payments to the industry in 2023. These payments were distributed among a variety of players in the music industry, including record labels, publishers, independent distributors, performing rights organizations, and collecting societies.

Mexican artists have also experienced notable growth regarding their plays on Spotify during 2023, receiving around US$317 million in royalties during 2023. According to the Loud&Clear report, this increase in royalties paid to Mexican artists reflects the outstanding performance of Spanish-language music within the platform, further underpinned by the fact that Spanish-speaking artists saw a 416% increase in their plays via streaming since 2017.

In addition, more than 5,400 Mexican artists were added to Spotify's editorial playlists in 2023, demonstrating the reach and diversity of the country's music scene on the platform. Mexican artists were also responsible for more than 55% of the songs that appeared in the Mexican Daily Top 50 last year, according to the report.

"[Spotify] is a platform that helps artists grow because of the personalized radar that each user has. That helps us measure our own statistics, know where to go to give shows or where they listen to us the most," shared Emjay, an artist originally from Guadalajara.

With this report, Spotify not only aims to polish its transparency policies regarding royalty payments to artists, but to maintain its commitment to the Mexican music scene by supporting local artists through access to a platform with global reach. With the increase in royalty payments and the constant discovery of new artists, the impact of Spanish-language music is expected to continue to grow, providing benefits for both the company and national creators.