Spotify Reportedly Planning to Change Their Royalty Structure in Early 2024

Photo by Haithem Ferdi on Unsplash

Spotify repeatedly came under fire for only paying 0.5% of its royalty pool to artists, and if new reports are to be believed – things are about to get worse. The streaming service is reportedly planning to introduce royalty cuts for less popular tracks.

According to a new report by Billboard and Music Business Worldwide, Spotify will introduce several major changes to its royalty model early next year. They’re reportedly restructuring their royalty system to de-monetize many tracks that had previously received 0.5% of their royalty pool.

Details are not known yet, but Billboard reports that the track will have to reach a minimum number of annual streams before it starts generating royalties. According to MBW, that money will be redistributed through Spotify’s Streamshare royalty pot and it’s expected to benefit more established artists and labels.

Another major change is connected to cracking down on fraudulent activity on this streaming service. This change will target non-music tracks such as white noise or ambient sounds, which will require longer play times to generate royalties.

Spotify is yet to confirm or deny these reports, and they kept things pretty civil in a statement to Billboard: “We’re always evaluating how we can best serve artists, and regularly discuss with partners ways to further platform integrity. We do not have any news to share at this time.”