Spotify plans royalty-model update to benefit “working artists”

The Future. Spotify is changing how its song royalty pool gets allocated. Instead of being restrictive, the changes may be a relief for the average artist, who could allegedly get a larger check for the same number of streams (still pretty tiny at $0.003 per play per month). With Warner Music Group also working with Deezer on a new revenue model, the next decade may be all about making music streaming a more sustainable and equitable living for artists.

Song sustainability
Spotify is making three changes to its “Streamshare” royalty system next year, according to Music Business Worldwide.

They are…

• “Introducing a threshold of minimum annual streams before a track starts generating royalties on Spotify — in a move expected to de-monetize a portion of tracks that previously absorbed 0.5% of the service’s royalty pool.”
• “Financially penalizing distributors of music — labels included — when fraudulent activity is detected on tracks that they’ve uploaded to Spotify.”
• “Introducing a minimum length of play-time that each non-music ‘noise’ track must reach in order to generate royalties.”

The changes are meant to curtail monetization for the millions of tracks on the platform that don’t even get 200 plays a year (a move that could put $40 million back in the royalty pool annually), punish people who try to game Spotify’s payout system with AI tools or “stream farms,” and keep white-noise artists from gobbling up cash just because people are listening to their playlists all night while they sleep.

Spotify has reportedly already been talking with labels about the changes, promising the new guardrails should route $1 billion over the next five years back to the musicians who make up the platform’s backbone.