Spotify is making changes to its royalties system, with reports suggesting that it will pay fewer royalties to less popular artists. Artists will be required to reach a minimum number of song streams before earning a payout. Billboard states that Spotify will “de-monetize tracks that had previously received 0.5% of Spotify’s royalty pool.”
However, Music Business Worldwide states that money will be redistributed through the Streamshare royalty pot and paid out to more popular songs on the platform. Any artist who fails to gain a significant number of streams, anyone accused of fraudulent activity, or anyone uploading white noise or nature sounds, will be impacted negatively. It’s not clear how Spotify will determine if a song falls into the category of white noise or nature sounds.
While Spotify’s exact method of measuring royalties is still unclear, Billboard claims that major labels will likely sign off on this change as it results in more money. Spotify is currently in talks with many record labels, including Universal Music Group, which according to NME, has announced a “newly expanded agreement” with Spotify that will benefit real artists with true fan bases.
The United Musicians and Allied Workers shared on social media that “artists have solutions to fix streaming but Spotify isn’t listening. Instead, they propose changes that will enrich the top of the pyramid even more, and make it even more impossible for working musicians to benefit from streaming.” The Future of Music Coalition added that “this marks a serious shift away from how the service was pitched to the musician community at launch, as a level playing field that treated all tracks the same. Over time, Spotify has shifted further and further away from that pledge.”
Spotify’s royalty plan will reportedly be implemented early next year, subject to new agreements with most record labels and distributors arriving before the introduction of the scheme
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