Association of Independent Music Ireland seeks clarification on Spotify's revamped royalty system

The Association of Independent Music Ireland has joined the independent music community in seeking clarification from Spotify on revamped royalties’ system

In late November 2023, Spotify announced revenue allocation reforms which the company said were aimed at tackling the issue of fraud on the platform.  Starting in January 2024, Spotify will roll out a stream-count threshold where tracks will need to hit 1,000 minimum streams annually in order to start generating royalties.

Along with this announcement, the Swedish streaming service also announced they will be charging labels and distributors per track in cases where fraud is detected.

After consulting with its members on the proposed revenue allocation reform, AIM Ireland has announced that it shares their member's concerns about what these revenue allocation reforms will mean for Independent artists and labels. As a result, AIM Ireland has decided to join the pan-European Independent Music Companies Association (IMPALA) in the quest for greater transparency and clarification from the streaming service.

Gathering views from members in 32 countries across the whole European music market including the EU, EFTA, UK and beyond, the IMPALA executive board has put forward a list of questions for Spotify on their plans for reforming the streaming market.

Areas IMPALA wish to seek clarification on include transparency from Spotify on its decision making process in cases deemed as fraud, how it plans to protect royalties of smaller independent artists and labels impacted by the new threshold, and to provide assurance the new measures will not disproportionally benefit bigger labels and artists in revenue or discoverability. IMPALA is also seeking further debate and consultation with Spotify about the proposed reforms.

In their statement, the IMPALA board say that Spotify must ensure transparency before introducing these measures.

It reads, while IMPALA “welcomes the proposals from Spotify to limit dilution in the royalty pool from “functional” content, and also to apply financial penalties for fraudulent activity, as long as there are checks and balances in place".

The second cause of concern on how Spotify plans to introduce the minimum 1,000 streams threshold was articulated as: 'As regards the threshold for which tracks are not remunerated, the IMPALA board agrees with the aim of tackling revenue dilution but opposes the principle of a "blunt instrument" that demonetises repertoire altogether to the benefit of more popular tracks".

Continuing the statement read: They feel that the data for any change must show that smaller and less established labels and artists do not lose out, as well as deep catalogue repertoire and of course smaller territories, specialist genres and longer tracks.”

Gill Dooley, the CEO of AIM Ireland said of Spotify's proposals:, "Almost 60% of the Irish population has access to a music streaming service, with Spotify positioned as the market leader. Spotify plays a crucial role in supporting independent artists and their teams through AIM Ireland's Friends of programme. I fully believe that both AIM Ireland and Spotify strive for a fairer streaming ecosystem, - acknowledging the current overflow of content on Spotify's platform is unsustainable".

AIM Ireland is part of the Independent Music Companies Association board, shortened  to IMPALA, a non-profit trade association which boasts a board of almost 6,000 members across 32 countries.