Our Take on Spotify's Latest Royalty Model Change
Posted: Sun Dec 22, 2024 9:22 am
In case you haven’t heard, there have been a lot of articles published about the planned changes to Spotify’s “royalty model.” Spotify has officially confirmed these changes, so we thought we’d dig deeper into the planned changes, why Spotify is making these changes (according to them), and our views on what will undoubtedly be the new normal.
Note: If you are new to understanding Spotify’s royalty model and want to understand how the “royalty pool” works, it may be helpful to understand the royalty model that has been in place since day one. Spotify has written an article explaining how it works, as well as a video that you can watch here .
Our Take on Spotify's Latest Royalty Model Change
Change #1: Song Monetization new zealand email list Requirements
Starting in early 2024, songs must reach at least 1,000 streams within a 12-month period to generate royalties. Songs with fewer streams will not receive royalties.
Spotify will not make more money under this model. There is no change to the size of the music royalty pool Spotify pays to rights holders; Spotify will simply use the tens of millions of dollars annually to increase payments to all eligible songs, rather than spreading them out in $0.03 payments.
Why? Spotify has stated that this is the reason for the change:
»What’s more impactful is that these tens of millions of dollars a year will be increased payouts to those who rely most on streaming revenue, rather than being doled out in minuscule payments that typically don’t even reach the artist (as they don’t exceed distributors’ minimum payout thresholds). 99.5% of all streams are for songs that have at least 1,000 annual streams, and each of those songs will earn more under this policy… Spotify also believes the policy will eliminate a strategy used to try to game the system or hide artificial streaming, as uploaders will no longer be able to generate pennies from an extremely high volume of songs. For more details on this policy, check out Spotify’s Help Center for Artists here . »
Note: If you are new to understanding Spotify’s royalty model and want to understand how the “royalty pool” works, it may be helpful to understand the royalty model that has been in place since day one. Spotify has written an article explaining how it works, as well as a video that you can watch here .
Our Take on Spotify's Latest Royalty Model Change
Change #1: Song Monetization new zealand email list Requirements
Starting in early 2024, songs must reach at least 1,000 streams within a 12-month period to generate royalties. Songs with fewer streams will not receive royalties.
Spotify will not make more money under this model. There is no change to the size of the music royalty pool Spotify pays to rights holders; Spotify will simply use the tens of millions of dollars annually to increase payments to all eligible songs, rather than spreading them out in $0.03 payments.
Why? Spotify has stated that this is the reason for the change:
»What’s more impactful is that these tens of millions of dollars a year will be increased payouts to those who rely most on streaming revenue, rather than being doled out in minuscule payments that typically don’t even reach the artist (as they don’t exceed distributors’ minimum payout thresholds). 99.5% of all streams are for songs that have at least 1,000 annual streams, and each of those songs will earn more under this policy… Spotify also believes the policy will eliminate a strategy used to try to game the system or hide artificial streaming, as uploaders will no longer be able to generate pennies from an extremely high volume of songs. For more details on this policy, check out Spotify’s Help Center for Artists here . »