Spotify’s Top Earners Surge, US Subscriptions Hit 106.5M, and YouTube Doubles Down on AI

How The Music Business Works - Issue #53

Welcome back to How The Music Business Works.

This week’s shortlist points to an industry still being reshaped by scale, rights enforcement, and platform control. Spotify’s latest Loud & Clear data sharpens the debate about who benefits most from streaming growth, while new RIAA figures show the US subscription economy is still expanding even as ad-supported streaming softens. At the same time, YouTube is trying to position AI as infrastructure rather than disruption, and neighboring-rights disputes in Europe and the US show how much money remains tied up in legal and contractual interpretation.

Here’s what you need to know:

Spotify’s royalty pyramid keeps widening, but the fastest growth is still at the top

Spotify’s new Loud & Clear figures offer a useful snapshot of how streaming income is scaling across artist tiers. According to the company, 80 artists generated more than $10 million each from Spotify alone in 2025, up from just 10 in 2017, while 1,540 generated more than $1 million, and 13,800 topped $100,000. Spotify says artist counts have at least tripled at every earnings threshold since 2017, but the steepest percentage growth remains concentrated at the top end. The company also argues that the million-dollar tier is no longer reserved for global stars, noting that more than 80% of artists generating over $1 million did not place a track in Spotify’s Global Daily Top 50. That strengthens Spotify’s case that sustained audience development can now support viable careers, even as the underlying distribution remains highly unequal.

US subscriptions returned to stronger growth in 2025, pushing recorded revenue to a new high 

The RIAA’s 2025 year-end data shows the US recorded music market reaching $11.535 billion in wholesale revenue, up 3.1% year on year, with premium paid subscriptions remaining the main engine. Paid premium accounts hit 106.5 million, a net gain of 6.5 million, the strongest annual increase since 2022. Premium subscription revenue rose 6.8% to $5.88 billion, while total paid subscriptions generated $6.4 billion and represented 55.3% of US recorded revenue. The more mixed part of the picture is that ad-supported streaming dipped 0.6% to $1.79 billion and non-premium subscription revenue fell 4.5% to $495.2 million. Vinyl continued to grow, reaching $1.04 billion in revenue. The RIAA data shows paid subscription revenue increasing while ad-supported and non-premium revenues declined year on year.

YouTube is framing AI as a music-industry tool, with guardrails around likeness and low-quality output

Lyor Cohen’s latest message to music partners shows YouTube holding to a now familiar but commercially important AI position: generative tools should expand creative workflows, not replace artists. In the note, Cohen reiterated Neal Mohan’s line that AI should remain “a tool for expression, not a replacement,” while also saying YouTube is building new guardrails for likeness detection and trying to limit the spread of low-quality AI content. Cohen also referenced YouTube’s existing Content ID system in the context of managing AI-generated material. He said the company is developing systems to identify synthetic audio and video, including tools focused on voice and visual likeness. The update forms part of YouTube’s ongoing communication with rightsholders around AI-related policy and enforcement.

Ireland’s law change has reopened the fight over neighboring-rights reciprocity in Europe

Ireland’s decision to change its copyright rules so US performers can receive radio royalties from Irish airplay has given SoundExchange fresh momentum in its long-running push for broader “national treatment” across Europe. SoundExchange CEO Michael Huppe argues that the RAAP ruling by the EU courts means other member states are also legally obliged to make similar changes. The issue is commercially significant because US terrestrial radio still does not pay performers or labels, so money would flow in one direction only. European trade groups, including IMPALA, say that in countries that have already amended their rules, local artists and labels can end up with reduced income, and they want the European Commission to step in with a legislative fix. IMPALA has called on the European Commission to introduce legislation addressing the issue. The dispute centers on how neighboring rights revenues should be distributed between US and European performers.

Dionne Warwick’s countersuit turns a contract dispute into a warning about royalty-recovery oversight

Dionne Warwick’s legal fight with Artists Rights Enforcement Corporation has become more than a standard termination dispute. Warwick’s countersuit alleges that AREC, which had accused her of unlawfully ending a 25-year-old agreement, used an unfair and overly broad interpretation of that contract to take millions in royalty income over decades. CMU reports that Warwick is seeking restitution and describing the company as presenting itself as an artist advocate while acting primarily in its own interest. Separate coverage indicates that her filing argues AREC took a 50% commission on royalty streams far beyond the original scope of the deal. Warwick is seeking damages and the return of funds allegedly collected under the agreement. The case focuses on the scope of AREC’s contractual rights and the commissions applied to recovered royalties.