The music streaming platform, Spotify, has announced that all songs on its database with less than 1000 streams will be demonetized. The policy was rolled out officially on April 1, and its plans were reported in a Spotify report last year, titled “Modernising our royalty system.” The implementation of the policy comes after months of speculation about new policies and alleged rumors of a more challenging system that makes generating royalties harder for artists.
According to Spotify’s data, there are currently about 100 million songs on the platform, and only 37.5 million of these songs meet the new streaming requirements that allow them to generate revenue. This policy will affect about 60% of the songs in Spotify’s library. However, Spotify claimed that the demonetization of the tracks would not have an impact on the size of the music royalty pool being paid out to rights holders.
The new system requires a minimum number of unique listeners for track royalties to apply. Also, Spotify has brought in measures to stop the rising incidents of fake streams after detecting a rise in fraudulent activity. This system aims to increase royalty payment amounts for eligible tracks instead of spreading it across many low-performing songs.
Early last year, Spotify announced its plan to cut 17% of its workforce to save costs. At the time, the company had recently experienced better-than-expected third-quarter profits. Spotify employs about 9,000 people, meaning 1,500 jobs were expected to be lost in the current round of layoffs.
Recently, Spotify suggested a “superfan clubs” feature could be introduced soon, but there has been no further news on the matter
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