Spotify (NYSE:SPOT) defended its artist payment model Wednesday, revealing it paid $10 billion to the music industry in 2024 as subscriptions and monthly active users surged.
The company said total payouts to artists, labels, and publishers have now reached $60 billion since its founding in 2006. The announcement follows a new multi-year agreement with Universal Music Group (UMGNF), which aims to provide more favorable payments to musicians through Spotify's audiobook-music bundle.
However, the company remains under scrutiny, with the National Music Publishers' Association filing a complaint with the Federal Trade Commission (FTC) last year. The association argued the bundle could harm royalty payments, calling it a scheme to increase profits by deceiving consumers and cheating the music royalty system. Despite the criticism, Spotify reported strong growth.
Monthly active users grew 14 million to 640 million in Q3 2024, while net subscribers rose six million to 252 million, exceeding expectations. Revenue climbed 21% year-over-year to 4 billion, with premium revenue up 24%. Vice President for Music Business David Kaefer said Spotify's next goal is to reach one billion paying listeners globally.
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