Listeners often stream these functional genres for hours at a time in the background, and this is sometimes exploited by bad actors who cut their tracks artificially short - with no artistic merit - in order to maximize royalty-bearing streams.įor example, a typical song is a few minutes long. In the streaming era, “functional” genres are popular – like white noise, whale sounds, static, and so on. We also believe the policy will eliminate one strategy used to attempt to game the system or hide artificial streaming, as uploaders will no longer be able to generate pennies from an extremely high volume of tracks.įor more details on this policy, check out the Spotify for Artists help center here. 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. It’s more impactful for these tens of millions of dollars per year to increase payments to those most dependent on streaming revenue - rather than being spread out in tiny payments that typically don’t even reach an artist (as they do not surpass distributors’ minimum payout thresholds). There is no change to the size of the music royalty pool being paid out to rights holders from Spotify we will simply use the tens of millions of dollars annually to increase the payments to all eligible tracks, rather than spreading it out into $0.03 payments. Spotify will not make additional money under this model. Starting in early 2024, tracks must have reached at least 1,000 streams in the previous 12 months in order to generate recorded royalties. How We’re Addressing It: Track Monetization Eligibility And these small payments are often forgotten about.īut in aggregate, these small disregarded payments have added up to $40 million per year, which could instead increase the payments to artists who are most dependent on streaming revenue. Tens of millions of them have been streamed between 1 and 1,000 times over the past year and, on average, those tracks generated $0.03 per month.īecause labels and distributors require a minimum amount to withdraw (usually $2-$50 per withdrawal), and banks charge a fee for the transaction (usually $1-$20 per withdrawal), this money often doesn't reach the uploaders. Today, Spotify hosts well over 100 million tracks. These charges will support our continued efforts to keep the industry and platform free of artificial activity. We believe this will meaningfully deter labels and distributors from continuing to distribute the music of known bad actors that attempt to divert money from honest, hardworking artists. Spotify is able to fight artificial streaming once it occurs on our platform, but the industry would be better off if bad actors were disincentivized from uploading to Spotify and other streaming services in the first place. This new deterrent follows improved artificial streaming detection technology we rolled out earlier this year, as well as the establishment of the newly formed Music Fights Fraud Alliance. How We’re Addressing It: Charges for Artificial StreamingĪs a new deterrent, beginning early next year we will start charging labels and distributors per track when flagrant artificial streaming is detected on their content. Still, bad actors continue to attempt to steal money from the royalty pool that should be delivered to honest, hardworking artists. Spotify invests heavily in detecting, preventing, and removing the royalty impact of artificial streaming. While each of these issues only impacts a small percentage of total streams, addressing them now means that we can drive approximately an additional $1 billion in revenue toward emerging and professional artists over the next five years. So, we’re working in close collaboration with industry partners - artist distributors, independent labels, major labels, label distributors, and artists and their teams - 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. However, as the royalty pool and catalog on Spotify have surged, three particular drains on the royalty pool have now reached a tipping point. 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.
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