Spotify: We've paid out $1 billion in royalties since launch

Spotify introduces a Web site aimed at explaining its operations to artists and other music professionals.

Spotify has launched a new Web site in an effort to make its business model more transparent to artists and other music professionals. Along the way, the company also announced interesting details on just how much cash it doles out.

According to Spotify, its new site is designed to provide additional insight into its operation through the use of data and business analysis. As part of that, Spotify said on Monday that it has issued $1 billion in royalties since its inception in 2009. At this time last year, its total royalty payout was at $500 million, meaning during 2013 alone, Spotify has coughed up $500 million in royalties.

On its new Web site, Spotify also tries to make the case that it's exceedingly generous with artists. The company claims to pay nearly 70 percent of its revenue in royalties, adding that "we believe that this is the fair approach to take."

As the digital age has proven, however, royalties are difficult to track. It's believed that artists get pennies on the dollar for every song of theirs that consumers buy in the iTunes store. A similar scenario is believed to play out through digital streaming. The lion's share of the cash, in other words, goes to record labels.

Over time, Spotify plans to share more details on its business with the music community. It's not clear how often the site will be updated, but there are several topics already available on the site, including information on how Spotify works and best practices for participating artists.

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About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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