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Spotify to revise royalty structure, impacting artists with fewer streams

Including a minimum threshold of 1000 plays per track to qualify for a payout.

Photo credit: Haithem Ferdi on Unsplash

Spotify is planning to revise its royalty structure, which will result in lower payments for artists who have fewer streams. The new structure includes a minimum threshold of 1000 plays per track to qualify for a payout. This updated royalty plan is expected to be implemented in the early months of next year.

According to reports from Billboard, Spotify will no longer allocate royalties to tracks that previously received 0.5% of Spotify’s royalty pool. This change will have an impact on artists who do not generate a significant number of streams, as well as those who have been accused of fraudulent activity or who upload white noise or nature sounds.

The funds that were previously allocated to these less popular tracks will now be redistributed through Spotify’s Streamshare royalty pot, benefiting more popular songs on the platform. This move aims to address the issue of tracks earning less than five cents per month on average.

However, there are concerns within the music industry. The United Musicians and Allied Workers have criticized Spotify for the proposed changes, stating that they will primarily benefit top-tier artists and make it more difficult for working musicians to benefit from streaming. The Future of Music Coalition has also noted that these changes deviate from Spotify’s initial promise of a level playing field for all tracks, which has raised concerns among artists.

The specifics of how Spotify will calculate royalties under the new structure remain unclear. The company will need to negotiate new agreements with most record labels and distributors before implementing the plan.

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