Spotify officially announces its new policy for minimum streams to "modernise their royalty system"

Last month Spotify announced that it was planning to implement changes to its streaming royalty model in early 2024 that would adversely effect the lowest-streaming acts, non-music noise tracks and distributors and labels committing fraud.

Reports circulated saying that the tech giant would require 1,000 listens per track over a period of 12 months before it can generate any royalties.

Today, the Swedish Streaming company confirmed these reports and announced its detailed plan to 'modernising' their royalty system.

The announcement includes proposals that will allegedly drive an additional $1 billion toward emerging and professional artists. The announcement includes new policies intended to curb fraudulent streams, reduce payouts for “functional noise” content, create new listening time thresholds to generate income on certain tracks as well as the much publicised 1,000 minimum listens threshold.

Spotify have announced today that beginning in early next year, a track will have to generate 1,000 streams over the course of 12 months in order to generate royalties.

In their statement, the company's reasoning behind this move was that "It’s more impactful for these tens of millions of dollars per year to increase payments to those most dependent on streaming revenue — rather than being spread out in tiny payments that typically don’t even reach an artist".

The company cited that often between bank fees and the requirement of a minimum amount to withdraw payouts from a label or a distributors, these small payments on track that generate less than 1,000 streams are often forgotten about.

They have cited that this change alone would bring an estimated $40 million back into the royalty pool for artists who depend on streaming for revenue. The company also said that Spotify itself will not make any additional money under this new model.

Spotify maintains that the issue at hand is artificial streaming which the platform describes as  "an attempt to manipulate Spotify by using automated processes (bots or scripts)". In theory these stream farms can generate 'white noise' content which they then can listen to on loop, generating passive income.

How Spotify plans to tackle artificial streamers: 

As a new deterrent, beginning in January 2024, Spotify will start charging labels and distributors per track when flagrant artificial streaming is detected on their content.

Spotify wagers that this will deter labels and distributors from continuing to distribute the music of known bad actors which they say "attempt to divert money from honest, hardworking artists".

Another major new change that will occur is new policies for noise recordings, such as whale noises, white noise, ASMR content, nature sounds, sound effects and machine noises.

This type of content will now require a longer listening length threshold before they can start to generate revenue.

Previously, these tracks could generate revenue in the same way that songs could on the platform, after 30 seconds of play. Under the new rules, noise tracks will require 2 minutes of play before they are remunerated.

This is because bad actors have the opportunity to take advantage of the existing system and create playlists with a series of 30 second long tracks back to back on a playlist, in order to maximise revenue. This change will slash revenue for what Spotify calls these 'bad actors'.