Spotify's New Policy Shift: How It Affects You as an Artist or Producer

In 2024, Spotify aims to raise its royalty threshold as a measure to address non-performing music and the prevalence of fake streams.

Spotify has decided to adjust its policy, which will affect you as an Artist or Producer. The streaming giant plans to create a threshold for songs to receive royalty payments - in other words, the music industry might be less lucrative for smaller and emerging artists under this new policy. Under the current system, artists get paid between $0.003 to $0.005 per stream, which means artists would need approximately 334 to make $1.

You probably shake your head in shock because of how low that is. However, as of Q1 2024, Spotify will only pay artists who meet their 0.05 threshold. The streaming platform recently announced that creatives would need to generate a minimum of 1000 streams annually to start earning money from their songs. This change would affect local artists, specifically small and emerging artists. As the Jamaican idiom goes "every mickle mek a muckle". Streaming revenues might not be a substantial amount, but they accumulate after several releases. This is how a lot of young artists earn to reinvest in their careers, whether to run ads or pay a distribution company like Distrokid that charges $20 for their distribution services.

Although Spotify is not the only DSP (Digital Service Provider), it is the leading streaming platform for our region. Chartmetric.com data shows the significant differences in streams, Play listings, and Fans/followers between Spotify and other DSPs like iTunes, Deezer, Tidal, Amazon, etc. This indicates that Spotify could be responsible for the largest share of an artist's streaming revenues.

This new policy by Spotify will focus on demonetizing songs that get less than 83 streams per month and penalize artists and labels who used bots to boost their streaming numbers. The streaming platform believes that this new policy will benefit the artists, an estimated 40 million will be paid to artists in 2024 "tek from likkle, gi' big". Penalizing accounts that use bots to inflate streaming numbers and create a misleading perception is addressing a longstanding that plagues the industry. Spotify decision to tackle this issue will assist in leveling the playing field and promote fair competition. This practice has easily gone unnoticed, buying streams, increasing popularity, boosting momentum, and having the algorithm working in their favor.

Spotify has been fearless in adjusting its policies since its inception. With over 11 million artists and creators, Spotify is not new to criticism. The company's vision revolves around providing creators with the opportunity to break free from constraints. These changes will raise concerns among smaller artists, especially those outside the US. The move towards setting thresholds and legitimizing streaming numbers may benefit the company, commercial artists, and labels - but it also undermines the balance between creatives and the streaming platform.