Spotify has just released its latest Loud & Clear report for 2024 🪄🎉

For the uninitiated, Loud & Clear is Spotify’s initiative to break down artist earnings on the platform in a bid to uphold transparency. Since launching in 2021, the initiative has served deep dives into the streaming economy, explaining how royalties flow and how some markets are faring.

Last year, we looked at 2023’s numbers, where Nigerian artists generated ₦25 billion in royalties, while their South African counterparts brought in 256 million Rands. With 2024’s report now in, Nigerian artists have collectively earned ₦58 billion in royalties, more than doubling the 2023 figure and quintupling their earnings from 2022 (₦11 billion).

Spotify also revealed that the number of Nigerian artists making at least ₦10 million in royalties has more than doubled since 2023 and tripled compared to 2022.

“We remain committed to empowering Nigerian artists to earn from their art whilst maintaining transparency with artists and stakeholders,” says Jocelyne Muhutu-Remy, Spotify’s Sub-Saharan Africa Managing Director. “The incredible growth of Nigerian music, both locally and globally, is a testament to the talent and creativity within Nigeria, and we are proud to support its continued rise.”

A significant [though undisclosed] portion of the ₦58 billion in royalties earned by Nigerian artists in 2024 came from international listeners as Nigerian artists were discovered by first-time listeners over 1 billion times on Spotify this year. More than 1,900 Nigerian artists were added to Spotify’s editorial playlists, reflecting a 33% increase from 2023.

Looking at the figures, the growth appears explosive:

• 2022: ₦11 billion
• 2023: ₦25 billion (+127%)
• 2024: ₦58 billion (+132%)

On the surface, this suggests massive revenue growth for Nigerian artists on Spotify, but it gets interesting. To assess the true growth, we may need to convert these figures to USD using the respective [average] exchange rates per year:

• 2022: ₦11B ÷ 423 = $26M
• 2023: ₦25B ÷ 633 = $39.5M (~52% increase)
• 2024: ₦58B ÷ 1,465 = $39.6M (~0.25% increase)

Again, at first glance, this suggests Nigerian artists are earning significantly more each year. But when adjusted for the dollar-denominated payouts that Spotify actually makes, it tells me a different story.

While revenue more than doubled in Naira terms from 2022 to 2023 and again from 2023 to 2024, the actual USD earnings only grew by 52% in 2023 and then stagnated in 2024.

If you missed Economics classes in high school [secondary school, as we call it in Nigeria], this is a vivid case study of Real Growth vs. Inflationary Growth. The growth in Naira terms may be heavily influenced by inflation and currency depreciation rather than actual increases in dollar-denominated revenue. Since Spotify pays artists in USD, the weakening Naira exchange rate makes it appear that revenue is skyrocketing when, in reality, it isn’t keeping pace in real terms.

Don’t get me wrong… Naira growth is great, but a large part of it is due to exchange rate fluctuations rather than substantial growth in global earnings. According to Spotify, Local consumption of Nigerian music has increased by 206% year-over-year and by 782% over the past three years. So while Nigerian artists may be seeing increase in their streaming numbers, the revenue growth rate isn’t as explosive when measured in a stable currency like the USD.

A Spotify spokesperson said,

“We do not adjust for inflation to make sure we're clear and consistent in how we report at both a global and a local level on a year-over-year basis.

With that said, we're pleased to be able to report an overall trajectory of growth for Nigerian artists in our payouts, even accounting for inflation. Particularly as the number of Nigerian artists finding success with listeners from around the world continues to grow.”

Despite the currency-leaning distortion in revenue growth, Nigerian music’s reach continues to expand globally as:

• Over 1.1 million hours were spent streaming Nigerian artists worldwide.
• 250 million playlists featuring Nigerian artists were created by users globally.
• Nigerian music exports have grown 49% over the past three years.

In a country where currency volatility is high, revenue growth in Naira terms probably shouldn’t get one too excited. At best, its important to figure out how this increased visibility and global reach can translate into stronger dollar-denominated earnings, regardless of local currency fluctuations.

In 2024 alone, Spotify distributed $10 billion in royalties (Nigerian acts accounting for about 0.4% of this) to the global music industry, marking a tenfold increase over the past decade. The company has now paid out about $60 billion since inception. Music publishing payouts have also hit new highs, surpassing $4.5 billion to songwriters and publishing rights holders in just the past two years—with double-digit percentage growth from 2023 to 2024.

Also, huge shout-out to the Spotify team for having me host one of the Loud & Clear fireside chats with Phiona Okumu, Head of Music at Spotify. It was great discussing the industry in a room full of music business executives and stakeholders at the Loud & Clear breakfast yesterday, held at Sky Restaurant, Eko Hotel.