Spotify announced major changes to its royalty calculation system back in October 2023. This shift promised to revolutionize the way artists earn money on the platform. Fast forward to April 2024, and these changes are now officially live, signalling a new era for music streaming.
One of the most significant updates is Spotify’s commitment to driving an additional $1 billion towards emerging and professional artists over the next five years. This bold claim aims to address longstanding issues within the industry and ensure fair compensation for creators.
So, what exactly are these changes, and how will they impact artists?
Spotify’s new policies target three core issues:
- Deterring Artificial Streaming: To combat fraudulent streaming practices, Spotify will now charge labels and distributors for tracks flagged for artificial streaming. This move aims to disincentivize bad actors from exploiting the system and redirect funds towards honest artists.
- Better Distribution of Payments: Recognizing the struggle of small artists to earn meaningful revenue, Spotify has introduced a minimum threshold for streams to qualify for royalties. Tracks must now reach a minimum of 1,000 streams in the previous 12 months to be included in the royalty pool calculation. Additionally, there’s a requirement for a minimum number of unique listeners to prevent manipulation.
- Tackling Noise Recordings: In a bid to prevent the manipulation of functional genres like white noise and nature sounds, Spotify has implemented a minimum track length of two minutes for recordings to generate royalties. This move aims to ensure that artists producing genuine content receive fair compensation.
These changes mark a significant shift in Spotify’s approach to artist compensation and aim to create a more equitable ecosystem for all musicians. By cracking down on fraudulent practices and ensuring fair distribution of royalties, Spotify hopes to empower emerging artists and foster a healthier music industry.
However, these policies also raise questions about the future of certain genres and the impact on artists who rely on unconventional forms of expression. Will functional genres like white noise be overshadowed by mainstream music, or will this move pave the way for a more diverse music landscape?
In a parallel development, Spotify’s rival, Deezer, has taken steps to clean up its platform by removing over 26 million tracks, including noise recordings. This move reflects a broader industry trend towards quality curation and artist-centric platforms.
As the music streaming landscape continues to evolve, these changes signal a new chapter for artists and listeners alike.