I have some bad news for you.
Spotify, the world's largest music streaming platform, will demonetize millions of artists in spring 2024.
Yes, you read that right.
One major issue with the music industry today is the overwhelming amount of new releases. This is compounded by the influx of music created by artificial intelligence, which floods our playlists with songs lasting only one and a half minutes. The problem is that these AI-generated tracks often end up in users' playlists despite their poor quality, as they are promoted through automated plays. Unless Spotify recognizes this trend and implements measures to address it, the future of music streaming looks bad.
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According to the current situation, every song on Spotify must receive over 1000 plays per year before any payouts begin. If your song doesn't reach that threshold, you get nothing. Zero. Nada.
Spotify claims that this change will benefit the artists who generate the most value for the platform and that it will increase the overall royalty pool by 0.5%.
Not you, not me, not the millions of small and independent artists who make up most of Spotify's catalogue.
It's estimated that a total of 40 million dollars per year will be redistributed and not paid out to small artists. But where does this money end up?
You guessed it: in the pockets of the big major labels like Universal, Warner and Sony Music, who have a market share of 70%. This data shows that these big players will receive approximately 28 million dollars more in revenue in the future.
I call this the Robin Hood Reverse: Take it from the poor and give it to the rich.
The mistake is that every single song has to reach that threshold. Let's say you started a small music label that has already released 500 songs. Of these 500 songs, 400 have only reached 900 streams yearly. That makes a total of 360,000 streams per year - but the label and the artist still don't get paid anything? Over 10 years, in this hypothetical example, 3.6 million streams would not be paid for.
Spotify, but that's not acceptable. Shame on you. I hope this doesn't go through and something changes in the plans.
Spotify is sending the wrong message to the music industry. They are telling us that our music is only worth something if it reaches a certain level of popularity.
They tell us we don't matter or deserve to be paid for our hard work and creativity.
This is unacceptable.
This is unfair.
This is outrageous.
In my view, the YouTube monetisation model is more beneficial. You need to meet certain criteria for monetization and attain a specific amount of watch time. However, once you meet these requirements, all of your videos are eligible for monetization, and you don't have to worry about meeting yearly targets for each video.
Since Spotify is the biggest streaming provider and has almost a monopoly, it's hard to say how to react; on the one hand, it's essential that your music is available and can be heard; on the other hand, this change is really painful since Spotify doesn't pay much anyway.
I would still recommend everyone to sign up for Bandcamp so that at least your most loyal fans can buy your music and support you, even if it's only symbolically.
P.S. If you want to learn more about why Spotify not paying Royalties and what they changed in their policies, click on the following Button.
Spotify is introducing new policies to support emerging and professional artists. The aim is to address three particular issues that have been reducing the royalty pool and driving less revenue towards these artists. The issues include artificial streaming, small payments not reaching artists and gaming the system with noise. In order to deter labels and distributors from distributing music from known bad actors, Spotify is introducing charges for artificial streaming. Starting in early 2024, tracks must have reached at least 1,000 streams in the previous 12 months to generate recorded royalties. This will help increase payments to all eligible tracks.
Starting 2024, new policies will be implemented to address the issue of short noise recordings being exploited to maximize royalty-bearing streams. The minimum track length for functional noise recordings will be increased to two minutes, and the value of noise streams will be reduced to a fraction of the value of music streams. These policies aim to create a more fair playing field for artists and right-size the revenue opportunity for noise uploaders.
I am Marcus, a music enthusiast who runs a mixing and mastering business. Additionally, I compose insightful articles for my blog and produce music as a member of the techno duo Agravik.