Spotify’s new royalty model is now live

According to an official announcement from the platform, from the 1st of April Spotify’s new royalty model is now live.

Last November, the leading streaming giant announced that it would be changing the way it calculates and pays royalties in the near future. This change came into effect on the 1st of April 2024, so the new Royalty Model is now Live.

The official Spotify announcement about the changes, published in November was updated on April 1, Monday. Although one would think so given the date, it’s not just a joke on 1 April, as the platform was already considering bringing its changes into force earlier this year. The new policies aim to funnel “an additional $1 billion in revenue towards emerging and professional artists over the next five years”. But there are many more objectives, such as 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”.

The most interesting one is “better distribute small payments that aren’t reaching artists”, which sets a minimum threshold for tracks before they generate any revenue. In numbers, this means that tracks must reach at least 1,000 streams in the previous 12 months to be included in this new royalty pool. However, this new policy also includes a unique listener detection to prevent fraud, but Spotify will not say how many unique listeners are required to be eligible.

Spotify stated in a previous blog post that 99.5% of all tracks on the platform “are of tracks that have at least 1,000 annual streams”. This is to demonstrate that artists are better off with the new policy, as “each of those tracks will earn more under this policy”. Some weeks ago, the CEO of Spotify, Daniel Ek, further discussed royalty rates, providing some interesting facts about the music industry.