In October, MBW broke the news that major changes were coming to the way Spotify calculates recorded royalties in early 2024.
In November, the music streaming giant confirmed exactly what those changes were and claimed that, via its new policies, it will be able to drive “an additional $1 billion in revenue toward emerging and professional artists over the next five years”.
According to Spotify, as of this Monday (April 1, 2024), all of these policies are now officially live on the platform.
Spotify’s new policies aim to tackle three core issues:
(1) To “further deter artificial streaming”
(2) To “better distribute small payments that aren’t reaching artists,” and
(3) “Rein in those attempting to game the system with noise”.
Spotify’s policy to “better distribute small payments that aren’t reaching artists,” sees the introduction of a minimum threshold for streams before any track starts generating royalties on the service.
What the means in practice is that tracks must have reached a threshold of at least 1,000 streams in the previous 12 months to be included in the recorded music royalty pool calculation.
As MBW reported in December, there’s also a minimum number of unique listeners required for a track to become eligible for royalties. According to Spotify, this policy will ensure that users “can’t game the system by streaming the track hundreds of times in order to qualify”.
Spotify says it won’t share the number of unique listeners required to become eligible for royalties “to prevent further manipulation by bad actors”.
Spotify said in a blog post that “99.5% of all streams” on its platform “are of tracks that have at least 1,000 annual streams”, and that “each of those tracks will earn more under this policy”.
CHARGES FOR ARTIFICIAL STREAMING
Also now in effect on the platform, in an attempt to “deter” artificial streaming, Spotify will charge labels and distributors per track when “flagrant artificial streaming” is detected on their content.
Spotify explained in a blog post that it “is able to fight artificial streaming once it occurs on our platform, but the industry would be better off if bad actors were disincentivized from uploading to Spotify and other streaming services in the first place”.
The blog post added: “We believe this will meaningfully deter labels and distributors from continuing to distribute the music of known bad actors that attempt to divert money from honest, hardworking artists.
“These charges will support our continued efforts to keep the industry and platform free of artificial activity.”
NEW POLICIES FOR NOISE RECORDINGS
A policy to prevent “bad actors” from “gaming the system with noise” is also live on Spotify’s platform.
Spotify has increased the minimum track length of functional noise recordings to two minutes in order to be eligible to generate royalties on the platform.
Functional genres include white noise, nature sounds, machine noises, sound effects, non-spoken ASMR, and silence recordings.
In a blog post explaining this policy, Spotify said that “listeners often stream these functional genres for hours at a time in the background, and this is sometimes exploited by bad actors who cut their tracks artificially short — with no artistic merit — in order to maximize royalty-bearing streams”.
According to Spotify, “by setting a minimum track length, these tracks will make a fraction of what they were previously earning (because two minutes of listening to noise recordings would generate one royalty-bearing stream not four), freeing up that extra money to go back into the royalty pool for honest hard working artists”.
Last month, Spotify rival Deezer confirmed that it has removed over 26 million tracks, including noise tracks, in the months since it first launched its Universal Music Group-approved artist-centric payment system (in September 2023).
Deezer said that it had around 200 million pieces of content on the platform last year, which means that over 13% of this content has been deleted.
“The intention is to declutter the platform, focus on tracks that are valuable to our users and increase the market share for all artists who create this music,” Deezer CEO Jeronimo Folgueira told MBW.
He added: “The tracks that have been removed include noise, mono-track albums [albums made of copies of a single track], fake artists and tracks that haven’t been listened to in the past 12 months.”Music Business Worldwide
