Follow the Money
On the $11 billion that didn't reach most artists, the rights holder who isn't you, and what the value chain actually looks like
In January 2026, Spotify announced that it had paid more than $11 billion to the music industry in 2025. Charlie Hellman, Spotify's Head of Music, called it the largest annual payment to music from any retailer in history. The announcement was accompanied by a data breakdown, some carefully chosen comparisons to the CD era, and the implication that the argument about whether streaming compensates artists fairly should perhaps be revised in light of the numbers.
The $11 billion is real. Here is where it went.
It went to rights holders: record labels, distributors, publishers, collecting societies, and performance rights organisations. Artists are not rights holders unless they own their masters and their publishing, which most artists signed to labels do not, and which many independent artists partially do not, depending on their distribution arrangements, co-writing credits, and historical contract terms. The money went to the entities that hold the rights to the music, and then from those entities to the artists according to whatever their contracts said, after whatever recoupment conditions applied. Spotify's own announcement says this explicitly. The platform distributes roughly 70% of its revenue to rights holders, which then pay artists according to their individual contracts. The platform and the signed artist are separated by at least one entity in every case, and often several.
The structure of the royalty chain in 2026 looks like this: Consumer → Platform → Rights Holders → Artist. In the late 1990s it looked like this: Consumer → Retail Store → Record Label → Artist. The platforms have inserted themselves as a new middle layer, sitting between consumers and the entire rights holder ecosystem, taking their percentage, and distributing what remains. The flow is different. The artist being at the end of it is not.
Major label artists typically receive between 15% and 20% of recording royalties under their contracts. Independent artists can receive substantially more depending on their distribution arrangement, sometimes 85% or more of net receipts. But both groups are receiving a percentage of what the platform pays out, which is itself a percentage of what the listener's subscription fee generates, and what the listener's subscription fee generates per stream is approximately three to five thousandths of a dollar.
Of Spotify's 13 million or so uploaders, approximately 13,800 artists generated at least $100,000 in 2025 from Spotify alone, and around 1,500 generated more than $1 million.(1) These numbers are presented by Spotify as evidence of a thriving middle class of working musicians. They are also evidence that 13 million minus 13,800 is a very large number, and that 0.1% of the artist base earning $100,000 not really a flattering headline.
In January 2026, the same week that Spotify announced its record payout, Bonnie Tyler gave an interview to BBC Wales about 'Total Eclipse of the Heart' reaching one billion streams. Spotify had sent her a commemorative plaque. Asked about the money, she said: 'Oh it's nothing, just about nothing.'
Spotify subsequently told Music Ally that Tyler's entire catalogue had generated $2.7 million in payouts to rightsholders across 2024 and 2025 combined.(2) The key word is 'rightsholders.' The money went to whoever holds the rights to Tyler's recordings and publishing, which at this point in a forty-year-old career with multiple label changes, acquisitions, and licensing arrangements is not straightforwardly the person who sang the song. Spotify's payment and Tyler's receipt of it are two different things, connected by a contractual chain the platform has no visibility into and no responsibility for.
The Bonnie Tyler situation is not an edge case. It is the standard, made vivid by the specificity of one billion streams and the candour of one interview. The rights holder receives the payment. The artist receives what their contract with the rights holder says they receive, which depends on a deal made decades ago under conditions that have since changed entirely.
Justin Bieber sold his music catalogue to Hipgnosis Songs Capital in January 2023 for just over $200 million. The deal covered his publishing rights and his artist royalties from master recordings across 290 titles released before December 2021. Universal Music Group continues to own the actual master recording copyrights in perpetuity.(3) Britney Spears sold her catalogue around the same time for approximately the same amount, through Primary Wave, despite owning almost none of her recordings outright (Sony holds her masters), with the publishing on her biggest hits belonging primarily to the songwriters who co-created them.(4) Two artists, comparable headline numbers, entirely different underlying assets.
What Spears sold was something the traditional rights model has historically undervalued: name, narrative, cultural legacy, and the loyalty of a fanbase that spent three decades watching her fight a system built to extract value from exactly those things. That this turned out to be worth $200 million is interesting. It does not change the situation of the working independent artist who owns their masters, earns fractions of a cent per stream, and is trying to figure out whether their annual streaming income will cover a week’s rent. The catalogue market is for people who already have a catalogue worth buying. For the 99%, it has little bearing.
Spotify's argument about the $11 billion is that it represents continuous growth: from $1 billion in 2014 to $11 billion in 2025, and that this growth demonstrates the model working as intended. The Loud & Clear report released in March 2026 adds a supporting data point: the 100,000th highest-earning artist on Spotify generated $7,300 in 2025, compared to approximately $350 in 2015, a twentyfold increase in a decade.(5)
This is a real improvement. It is also worth reading in full context. The 100,000th artist on a platform with 13 million uploaders is in the top 0.77% of everyone who has put music on Spotify. Their income from Spotify alone in 2025 was $7,300. This is not even close to a living wage in any Australian city. It is not a living wage in most of the world. It’s barely a supplementary income. The argument that this represents progress, compared to $350 a decade ago, is technically correct but practically thin.
In 2024, Spotify introduced a 1,000-stream annual threshold for royalty eligibility. Tracks that do not accumulate 1,000 streams in a year receive no royalties at all. Chris Robley, who was CEO of CD Baby's parent company from 2008 to 2019, calculated that the policy withheld approximately $47 million from small independent artists in 2024 and redistributed it toward artists with higher stream counts, primarily major-label artists at the top of the distribution curve. 'The vast majority of royalties,' Robley wrote, 'are going to Taylor Swift for the 27 billion streams she had last year. I mean, nothing against Taylor — she deserves the royalties from her streams. But she doesn't also deserve a piece of your collective $47 million in demonetised independent artist royalties.'(6)
Spotify described this policy as redirecting royalties toward 'working artists.' The implication being that the artists whose tracks earned fewer than 1,000 streams were not working artists.
The alternative payment model is called user-centric. Under the current pro-rata model, your subscription fee is pooled with everyone else's and distributed according to total platform streams. Under a user-centric model, your fee goes to the artists you actually listen to. If you listen primarily to independent Australian musicians who each have 3,000 monthly listeners and no major label marketing budget, your subscription fee goes to those musicians, not to the artists who dominate the global stream count.
Deezer has implemented a version of user-centric payment. SoundCloud has a version of it. The argument against user-centric at scale is that the accounting complexity increases significantly and that smaller artists with very small listener bases might receive extremely small individual payments. These are real operational challenges. They are not arguments that the current arrangement is fair.(7) They are arguments that fixing the unfair arrangement is technically difficult. That is a different claim, and it has a different set of possible responses.
The Pack's 1:1 creator-consumer model is the user-centric model written into the cooperative's governance structure rather than left as a policy preference subject to revision. Each subscription goes to the artists the member actually streamed. This cannot be changed by a board decision under pressure from rights holder partners who benefit from the current distribution model, because it is not a board policy. It is system architecture.
The question of whether streaming pays $11 billion to the music industry is answered ‘loud and clear’ in the affirmative. The question of whether that $11 billion distributed via the current structure reaches the people who made the music that made the platform worth using is answered more quietly, with a tastefully decorative commemorative plaque.
Follow the money. It goes exactly where the structure was designed to send it.
Notes
Spotify Loud & Clear report, March 2026 — annual artist royalty data. https://loudandclear.byspotify.com/takeaways/
Music Ally — Bonnie Tyler 'Total Eclipse of the Heart' hits 1 billion Spotify streams; Spotify catalogue payout figures, January 2026. https://musically.com/2026/01/27/bonnie-tyler-makes-nothing-from-total-eclipse-of-the-heart-streams/
Billboard — Justin Bieber closes sale to Hipgnosis for $200M, January 2023. https://www.billboard.com/pro/justin-bieber-sold-publishing-recording-rights-hipgnosis/
Spotify Loud & Clear report, March 2026 — 100,000th artist earnings comparison 2015 vs 2025. https://loudandclear.byspotify.com/takeaways/
Chris Robley / Disc Makers — 'Spotify's $47 Million Deception: How Small Artists Got Robbed', April 2025. https://blog.discmakers.com/2025/04/how-small-artists-got-robbed/
Deezer user-centric payment model documentation; SoundCloud fan-powered royalties overview. https://www.deezer.com/en/company/news/artist-centric/