A well-known distributor has recently shared new insights into Spotify's upcoming changes to its royalties framework, set to be implemented in 2024. These adjustments could potentially result in Spotify no longer compensating for streams on more than two-thirds of its music catalog.
The latest information regarding Spotify's compensation alterations was revealed in an opinion piece authored by Stem's President, Kristin Graziani. In this op-ed, Graziani argues that the changes will ultimately benefit artists. She also mentioned the introduction of "three new policies" that Spotify is planning to roll out in 2024.
As previously reported by Digital Music News, these policies include penalizing record labels and distributors for fraudulent streams and increasing the minimum playtime required for white noise tracks and similar uploads to be counted as streams.
When it comes to the first policy, it's anticipated that certain labels and distributors will face penalties when they provide content flagged for artificial streams. The exact rules and enforcement mechanisms are yet to be detailed, but it is expected that major-label tracks may not face as much scrutiny or penalties in this regard. Once again giving the big guys a leg up.
The second policy pertains to the length of time required for a track to trigger a stream. For years, brief 30-second white noise snippets have accumulated numerous streams and substantial royalty payments. By increasing the required playtime for a track to register as a stream (the exact length still unspecified), Spotify aims to remove many of these short uploads from the royalty pool. Which won't affect artists much. This is only used by people scamming Spotify for money,
The most significant of the three policies involves the annual stream-count threshold that tracks must achieve to generate Spotify royalties. Graziani specified a requirement of 1,000 plays during the previous 12 months. Based on publicly available data from Spotify, it's evident that approximately two-thirds of the platform's tracks have not reached this minimum threshold, let alone within the necessary timeframe. So if your song does not reach 1,000 plays in a year. You will be demonetized.
As the influx of tracks on Spotify continues, new artists may find it increasingly challenging to gain recognition and generate income from their music streams. In light of this, 2024 could see more competition from platforms that have been positioning themselves for success within the independent music industry. Check back in for more updates as the story progresses.
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