Island Records artist Sean Paul has surpassed 11 billion streams on Spotify across all credits. The Dutty Cup deejay is the most streamed Jamaican of all time on the platform with his top 3 songs being his “Rockabye ” feature with Clean Bandit surpassing 1.4 billion, “No Lie” with Dua Lipa has surpassed one billion, and “Temperature” has 700 million streams. On Tuesday Spotify confirmed their royalty charges as previously reported by WMV.
Changes that will contribute an additional $1 billion in revenue to emerging and professional artists over the next five years. According to Spotify, the surge in the royalty pool and catalog on the platform has led to three specific challenges that have reached a critical point.
To address these issues, Spotify is collaborating closely with industry partners, including distributors, independent labels, major labels, and artists and their teams. The primary objectives of Spotify’s new policies are to:
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- Supporting Artists’ Livelihood:
- “We’re introducing new policies to better support those most dependent on streaming revenues as part of their livelihood.”
- “As Spotify payouts to the music industry continue to grow — over $40 billion and counting — we want to make sure that money is going to the people our platform is designed to enable: emerging and professional artists.”
- Challenges in the Royalty Pool:
- “As the royalty pool and catalog on Spotify have surged, three particular drains on the royalty pool have now reached a tipping point.”
- “We’re working in close collaboration with industry partners to introduce new policies to (1) further deter artificial streaming, (2) better distribute small payments that aren’t reaching artists, and (3) rein in those attempting to game the system with noise.”
- “Addressing these issues now means that we can drive approximately an additional $1 billion in revenue toward emerging and professional artists over the next five years.”
- Artificial Streaming:
- “Spotify invests heavily in detecting, preventing, and removing the royalty impact of artificial streaming.”
- “Beginning early next year we will start charging labels and distributors per track when flagrant artificial streaming is detected on their content.”
- “These charges will support our continued efforts to keep the industry and platform free of artificial activity.”
- Lost Payments in the System:
- “Tens of millions of tracks have been streamed between 1 and 1,000 times over the past year, generating $0.03 per month on average.”
- “Starting in early 2024, tracks must have reached at least 1,000 streams in the previous 12 months to generate recorded royalties.”
- “99.5% of all streams are of tracks that have at least 1,000 annual streams, and each of those tracks will earn more under this policy.”
- Gaming the System with Noise:
- “Functional genres like white noise, whale sounds, and static are popular, often exploited by bad actors shortening tracks to maximize royalty-bearing streams.”
- “Starting next year, we’ll increase the minimum track length of functional noise recordings to two minutes to be eligible to generate royalties.”
- “We’ll work with licensors to value noise streams at a fraction of the value of music streams, right-sizing the revenue opportunity for noise uploaders.”
- Supporting Artists’ Livelihood:
One notable change is the introduction of a minimum threshold for streams before a track starts generating royalties. Starting early next year, tracks must have accumulated at least 1,000 streams in the previous 12 months to qualify for recorded royalties.
The Irish publicly trade company emphasizes that it will not profit additionally from this model, and the size of the music royalty pool paid out to rights holders remains unchanged. 99.5% of all streams on its platform meet this threshold, says Spotify and each of these tracks will earn more under the new policy.
Streaming Underworld: Are Criminals Profiting From Spotify?
To combat artificial streaming, Spotify will implement charges for labels and distributors when “flagrant artificial streaming” is detected on their content, starting in 2024. Additionally, Spotify plans to address the issue of noise recordings by increasing the minimum track length of functional genres (e.g., white noise, nature sounds) to two minutes, making them eligible to generate royalties. Spotify says in a release, “for example, a typical song is a few minutes long.
Some bad actors are shortening whale soundtracks to 30 seconds and stacking them consecutively in a playlist without listeners noticing, so that they earn outsized payments.” The company will also work with licensors to value noise streams at a fraction of the value of music streams. “By setting a minimum track length, these tracks will make a fraction of what they were previously earning freeing up that extra money to go back into the royalty pool for honest hard working artists,” Spotify says.
Deezer had announce changes in partnership with UMG in September, but those changes differ from Spotify’s approach. Deezer is not demonetizing tracks with fewer than 1,000 streams but is offering a ‘double boost’ in royalty calculations to musicians with at least 1,000 monthly streams from 500 unique listeners. Deezer also plans to replace certain ‘noise’ content entirely with its own “content in the functional music space,” not included in royalty payouts.
While both platforms are addressing streaming fraud, it’s unclear whether Deezer will impose fines on labels and distributors, as Spotify plans to do.
