Spotify changes its method for paying royalties

Spotify, has announced a major change to its royalty model that will take effect in 2024, generating discussion and debate throughout the music community. The most prominent change is the introduction of a 1,000 plays threshold for tracks to be eligible for royalty payments. While this has raised concerns, it is argued that this threshold could benefit artists, especially emerging artists, by ensuring more meaningful compensation for their work.

This threshold of 1,000 plays, which equates to approximately $3 in earnings, is designed to ensure that artists not only receive small fractions of pennies per song, as is currently the case, but can also access those earnings. In addition, Spotify seeks to address the problem of fraudulent plays, which affects up to 10% of total plays, by penalizing those responsible for these practices. In addition, differentiation in royalty rates between artist-created music and functional content, such as white noise and ambient sounds, is considered. These changes have also spurred discussion about raising subscription prices as a way to increase royalties for artists. Ultimately, there is a need for the music industry to work together to ensure fair compensation for artists, at a time when the evolution of the industry may be shaping its future and its balance between supporting emerging talent and adequately rewarding creators.