Spotify confirms USD500 million royalty payout this year following USD250 recent funding round
Music-streaming service Spotify confirmed that the company had paid a total of USD500 million to music rights owners in royalties. The announcement came after it also confirmed to TechCrunch that it had received USD250 million in funding in an investment round led by Technology Crossover Ventures. The tech news site noted that counting Spotify's recent payout, it had made USD1 billion in royalty payments since 2009.
In its opening letter on its website, Spotify said, "Our belief has always been that if we can offer fans a listening experience superior to piracy, then they will be happy to pay for it, and in turn we are happy to pay out nearly 70% of all the money we earn in royalties. We believe that this is the fair approach to take, and that as we grow we will become an increasingly significant contributor to artists' financial lives."
Despited crediting social media for its growth, Spotify received much pressure from both the public and private investors after some artists claimed the company was greedy that its agreement with music artists was not financially beneficial.
Spotify's new business to business play platform called Spotify Artists Website was launched to provide a clear interface for musicians and music managers to understand how creative content payout works and other pertinent information regarding the latter streaming music on Spotify's platform. Spotify's team-up with Next Big Sound had provided a dashboard for artists to manage real-time data regarding their content's performance with their listeners.
The royalty payout and the new platform could come from its recent funding rounds. According to TechCrunch, Spotify's new funding and its recent product release would signal more product launches in the future to prove to industry pundits that it is not a boom or bust business. The tech news site said it heard that Spotify has plans to release a web-version API for developers and other third parties in the near future.