Sources: Spotify plans major changes to its royalty model in Q1 2024, including a threshold of minimum annual streams before a track starts generating royalties
This is huge news - and it's been a long time coming. MBW has confirmed that Spotify is planning to make significant changes …
Music Business WorldwideTim Ingham
Context & Ripple Effects
The reported overhaul fits Spotify’s long-running effort to reshape its economics in label negotiations, including earlier discussions of lower royalty costs ahead of its IPO.
The proposal was subsequently made concrete in Spotify’s 2024 royalty rules, which set a 1,000-stream annual requirement and added a separate rule for noise recordings. That progression makes this report an early signal of a material platform-policy change rather than a routine licensing dispute.
First-order effects
Tracks that do not clear Spotify’s minimum annual-stream threshold would no longer generate recorded-music royalties, directly affecting the rightsholders behind low-listened-to releases.
Spotify would change how royalty eligibility is administered across its catalog, with the threshold becoming a new condition for payment rather than merely a reporting metric.
Second-order effects
Distributors, labels, and independent artists would need to reassess the value of long-tail catalogs on Spotify, because a portion of releases could no longer produce platform royalties.
The policy creates a stronger incentive for rights holders to concentrate promotion and release resources on tracks likely to clear the threshold, while platforms and labels face closer scrutiny over how small royalties are handled.
Third-order effects
If other streaming services adopt similar eligibility rules, music streaming could move away from paying every fractional stream and toward a model that prioritizes economically meaningful activity.
The change also highlights a broader bargaining shift: platform royalty design, not just headline payout levels, can determine how streaming revenue reaches smaller creators and catalogs.
The trend: Streaming services are increasingly using product and payout rules to make subscription music economics more sustainable as growth and royalty obligations collide.
Fraud in streaming is real. Spotify is finally acknowledging this, but still ignoring the simple solution so many have proposed: User-centric accounting, which would put subscribers' money into the hands of those they listen to. Simple and fair. And the last thing Spotify will do
Spotify is changing how it pays artists. Shifting $1 billion in royalties over 5 years. Learn about the biggest changes to music's royalty system since 2011↓ [image]
@curtisstigers Spotify is pulling the same shady crap with audiobook authors too. They changed the contract, added auto-opt in streaming and gave no info on $ per stream. Then they gave subscribers 15 hours free audio per month. This doesn't encourage sales, it encourages freeloa…
No one's music should be “demonetized” bc it's not popular. CDs at a merch table don't automatically become free if only 2 buy them. I hope Spotify will do the right thing, walk back this change, and not treat their very valuable service like Pirate Bay. A stream is a stream
People ask me about this a lot. It's simple: If you listen to Spotify you are supporting a company that makes money off the work of people they don't pay.
How will the Spotify royalty changes affect your payouts? My back-of-the-napkin: If your song gets above ~200 streams per year, it will likely earn ~7% more than it would have otherwise. If your song gets under ~200 streams per year, it will earn $0 instead of up to $0.60.... [im…
More cool news for independent music🥴 *Bandcamp going big business with Songtradr takeover *Streaming royalties already shite, will now be non-existent for Indies *EventBrite charging more *Vinyl manufacturing queues and cost gone insane *2 small music venues closing a week
“I have to wonder whether the smaller labels will see any point in keeping their music on Spotify. Streaming services ... have a reputation for pushing listeners toward music that's already massively popular, & it seems that this new arrangement will only increase that tendency.”
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. [image]
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.
After killing off the download business, Spotify will now kill off niche artists. Don't use this shithead company to stream music, use Apple Music, Deezer or Tidal https://www.stereogum.com/......
as i noted last week, 90% of spotify royalties go to the top 0.8% of artists. the bottom 0.5% contains a lot more music than you think, and this already-imbalanced system just got a whole lot more unfair [image]
This will devastate smaller, indie artists who already struggle to take home meager earnings from streaming services. Creating a class system that divides the less than 1% who account for the bulk of Spotify's payout will just further spotlight who the service is for: capital
@curtisstigers The problem is not Spotify, the problem is the labels, who co-own Spotify. But yes, what happened is the “unlimited streams for life by pre-paying $15/CD” model was broken down when streaming services were born. That genie ain't gettin' put back in. https://www.mus…
The area on the bottom of the triangle is equal to the area on the top. That's why Spotify and others make these cuts to broad parts of their base: it represents a huge savings. But also an enormous amount of real artists trying to get started 🧵: 1/5 [image]
🙄 “Spotify's soon-to-be-adjusted model won't in and of itself alter the size of the total royalty pool being paid out to creators and rightsholders. Instead, it will alter the allocation of money being paid out...by reducing the money going to (very) unpopular music...”
Spotify is changing its royalty model to crush streaming fraud and introduce a minimum payment threshold. its plan? to shift $1 billion in payouts towards ‘working artists’ over the next 5 years.