Reports indicate that Spotify is considering a significant change to its payout model that is sparking discussions within the music industry. The latest information reveals that starting early next year, Spotify’s ‘minimum annual threshold’ for tracks to begin generating royalties will be set at 1,000 streams.
FAQ
What is Spotify's 1,000-Stream Minimum?:
To earn royalties on Spotify, tracks must amass a minimum of 1,000 streams within a 12-month period, equivalent to over 80 streams per month. Tracks falling below this threshold won’t generate royalties.
Will Unpaid Artists Receive Any Compensation?:
No, artists whose music does not accumulate 1,000 streams within a 12-month period will not receive any royalties.
Are There Other Streaming Platforms with Similar Policies?:
As of now, Spotify is among the first major streaming platforms to introduce this 1,000-stream minimum requirement. However, more are to be expected with all DSPs making a major stance on “fraudulent streaming.”
Why is Spotify Implementing This Change?:
Spotify is introducing this change to address the issue of tracks with low stream counts, where the earnings are below what lots of distributors would typically pay out. Additionally, it aims to combat fraudulent streams and tracks, ensuring a fairer distribution of royalties.
In the past, distributors have sometimes retained these small amounts, accruing interest for themselves rather than passing it on to artists. By introducing this threshold, Spotify intends to redirect $40 million toward artists who exceed it.
Who Does This Affect?:
If your track receives fewer than 1,000 streams in a 12-month period, Spotify will not pay any royalties. If you’re in this category, Cygnus is ready to discuss marketing strategies that can help you surpass this threshold.
What Does This Mean for Smaller Artists?:
While this change may be challenging for artists with fewer than 1,000 streams, it also benefits smaller artists who surpass this threshold. They will have the opportunity to access a portion of the $40 million that Spotify intends to redirect to artists exceeding the threshold.
Instagram