As of April 1, 2024, Spotify has officially demonetized all tracks on the platform with under 1,000 streams.
The new royalty scheme, which was leaked and then officially announced in November 2023, means music that has not passed a pre-determined threshold of 1,000 plays in the prior 12 months will not be included in Spotify’s “Streamshare” royalty pool.
In its announcement blog post, Spotify said 99.5 percent of all tracks on the platform have more than 1,000 plays. The streaming giant claims the move will reallocate tens of millions of dollars each year to tracks above the 1,000-play threshold—an estimated $40 million in 2024.
Previously, five cents in royalties could be generated by about 200 plays on Spotify, according to Music Business Worldwide. Prior to the new ruling, Spotify said tracks below the 1,000-play threshold generated an average of 3 cents per month.
Spotify now also requires a minimum number of unique listeners for tracks to accrue royalties. The company says this is an attempt to stop “further manipulation by bad actors,” which targets individuals using bots or human-operated stream farms to artificially inflate playback numbers.
Additionally, “functional” genres—like white noise or nature sounds—now need two minutes of playback to start generating income. Previously these tracks could start earning royalties after just 30 seconds of playback.
Spotify’s royalty model overhaul has been met with frustration from the United Musicians and Allied Workers (UMAW) union. Yesterday, in a post on X, formerly Twitter, the organization argued that Spotify’s royalty pool estimates are incorrect and the now demonetized tracks actually make up 86 percent of music on the platform.
The changes come as Spotify looks for ways to recover lost funds. Since going public in 2018, the company has lost money every year, despite securing an initial valuation of $30 billion, according to CNN.
As such, Bloomberg reports that Spotify will raise its individual subscription price by $1 per month, while Duo and Family plans will increase by $2. Price changes will go into effect by the end of April in the UK, and later in the year in Australia, Pakistan and the United States.
Read more about Spotify’s new royalty model here.
As of April 1st, Spotify has demonetized any track on the platform that receives less than 1000 streams per year. That’s an estimated 86% of tracks on the platform. This new policy will impact small artists the most — the same artists that Spotify claims to support.
— United Musicians and Allied Workers (@UMAW_) April 3, 2024
Featured image from Unsplash.com.
