Many artists will now receive nothing at all, aside from the chance and privilege of existing on Spotify’s servers, which was previously known for underpaying them. According to Spotify, this is done to combat fraud, and it means that those who earn more than$ 1,000 per year will receive a refund of the money that previously went to these smaller artists and alleged con artists.
Additionally, the business is eliminating a lot of payments for so-called “noise” content, such as rooftop rain recordings and other items made for relaxation and white noise. Only noise recordings shorter than two minutes will be affected by the cuts. Additionally, Spotify is currently attempting to change its royalty structure so that payouts for noise recordings are lower than for songs. The business has n’t offered any specific information, though.
Spotify claims that these combined cuts will give artists an additional$ 1 billion over the course of the next five years, but it has n’t specified how the money will be redistributed; all it says is that the streamer “would not make additional money under this model.”
The remaining 0.5 percent account for just$ 40 million annually, which is significantly less than the advertised$ 1 billion in new funds being pumped into the system for established artists, even if you count$ 200 million over five years. It did note that 99.5 percent of all streams meet the aforementioned thresholds. Additionally, Spotify asserts that songs with fewer than 1,000 annual streams average$ 3 per year, which is not a lot. If those numbers are accurate, the entire situation might cost around$ 3. However, a precedent is being established in this situation.
According to Spotify, dishonest content producers frequently post large amounts of tracks in an effort to “game the system,” earning pennies for each that eventually add up to real money. The 1, 000 play threshold aims to stop this activity in its tracks. The company refers to this as artificial streaming because there is an AI component at play. Here, smaller artists are merely incidental damage.
In actuality, artists who have n’t received more than 1, 000 streams over the past 28 days are not even eligible to use Spotify’s recently introduced marketing toolset, which allows them to compensate the streamer for placement on home feeds.
A completely unrelated note, according to MixMag, Spotify is ceasing operations in Uruguay following the passage of a law mandating fair pay for artists. When the bill was first proposed in July, the company threatened to shut down, and now it has. Pablo Da Silveira, Uruguay’s minister of education, was reportedly written by a Spotify spokesperson to claim that the country would be required to “pay twice” artists royalties due to the bill. It continued by saying that Uruguay’s business model would become “unfeasible” if it complied with its fair pay laws.