Spotify confirms streaming thresholds for new royalty model

nme.com:

Spotify has confirmed the streaming thresholds for its new royalty model.Reports emerged last month that the streaming giant’s restructuring would mean that less popular tracks wouldn’t earn any royalties, despite the company reporting profits and subscriber gains.According to a Billboard report, a track would have to meet a minimum annual streaming threshold before it would start to generate royalties.However, the streaming threshold at which tracks will generate royalties has now been confirmed in a Consequence guest column by Kristin Graziani, president of music distribution platform Stem.“After doing some analysis on what Spotify has actually communicated to distributors, we can say that in reality, these changes are intended to benefit emerging and growing artists,” Graziani wrote.According to the article, Spotify is introducing three new policies in 2024.

Firstly, all tracks will have to reach a minimum streaming threshold of 1000 streams within 12 months to be paid a royalty. Secondly, labels and distributors will be charged a penalty for delivering content responsible for fraudulent streams.

And finally, functional tracks, like white noise or environmental sounds, for example, will require a longer minimum play time than music tracks to earn royalties.Graziani said that “Spotify is starting to take steps in the right direction”.According her analysis, those three policies will have “little to no negative impact on career artists”, and instead will “make more money available to them by way of a larger royalty pool”.1000 streams in a 12-month period will reportedly earn, at most, $3.00 (£2.44) in earnings.However, this figure is well below the threshold at which most distributors allow artists to transfer earnings.