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Spotify Plans Changes To Royalties Payout Model
Christian Eede , October 26th, 2023 13:33

New plans could see the introduction of songs requiring a minimum number of streams to generate a royalty payout

Spotify is reportedly lining up changes to its royalties model.

Billboard and Music Business Worldwide (MBW) report that the changes will be introduced early in 2024, and will affect artists who don't generate significant streaming numbers, as well as those who upload white noise and nature sounds to the streaming platform. The intention of the company, according to MBW, is to direct $1bn in royalty payments over the next five years to what it deems to be 'legitimate' artists and rights holders.

Under the new proposals, songs will be required to hit a minimum number of annual streams through Spotify before they generate royalties. It's believed that songs that receive only 0.5 percent of an artist's overall royalty pool will be demonetised under the new model. The money from those streams will instead be directed towards Spotify's Streamshare royalty pot and ultimately paid out to more popular songs.

The streaming platform is also aiming to crack down on users whose uploads are deemed to be "fraudulent." Non-music tracks, such as white noise and nature sounds, are among uploads which will now require longer playing times in order to generate royalty payouts. It's not yet known how Spotify will determine whether an upload is "fraudulent," nor how long the required playing time will be.

Responding to the Billboard and MBW reports, a Spotify spokesperson said: "We're always evaluating how we can best serve artists, and regularly discuss with partners ways to further platform integrity. We do not have any news to share at this time."