Spotify finally figured it out: it’s those unknown artists and white noise tracks that are hogging all the artist revenue.
That’s the logic behind Spotify’s revamped revenue project, revealed this week in a scoop by Music Business Worldwide. The new royalty model for artists will roll out in the first quarter of 2024, according to MBW’s sources. And if you’re a fledgling artist, it may reduce your royalties from small to none.
Artists frequently complain that Spotify’s rates are low because Spotify’s rates are, in fact, low. A 2021 report revealed that a tiny percentage of blockbuster artists on the platform claim the lion’s share of revenue. Spotify has actually gone out of their way to cut payments to artists, spearheading a 2019 appeal to reverse the Copyright Review Board’s decision to increase songwriting royalties by 44%.
Spotify’s answer to this threefold. The first item in their action plan is to pay unpopular artists even less.
The revamped royalty model will demonetize tracks that earn less than $0.05 per month. They plan to do this by establishing a threshold of minimum annual streams. Those that do not make the threshold will not be monetized.
MBW estimates that the threshold works out to roughly 200 plays.
Paying artists more money by paying the most modest artists nothing is a peculiar business model — the phrase “blood from a stone” also comes to mind — but Spotify is going ahead with it.
Naturally those who are abusing Spotify’s pro rata model of artist royalties through the rampant addition of AI-generated trash that litters the platform will simply bot their way past the threshold. There is significant evidence this is what is happening now: black hat hackers have been generating music via AI, deploying bots to rack up plays and collecting revenue from the royalty pool based upon these fraudulent numbers. In response, Spotify claims they will unleash new fraud protections that will punish distributors rather than just the artists (or “artists”) engaging in stealing royalties via clickfraud.
(Those interested in reading more about the almost inevitable apocalypse coming to Spotify can read our story on Boomy, just one company generating AI music to leverage a massive portfolio of tracks on the platform.)
Spotify also plans to deal with “non-music noise content” — i.e., white noise and other similar tracks — which claim outrageous royalties based upon users looking to play them as they sleep. Most white noise tracks are less than a minute long, designed to fool users into playing them just long enough to qualify their creator (again: “creator”) for royalty payments. Spotify has griped about white noise tracks in the past.
It’s not really clear how any of these things would lead to improved royalties for working artists — a crackdown on fraud is most promising but technically complicated and extremely expensive to carry out.