Spotify Officially Announces New Policy for Royalty Payouts, “Artificial” Streams, and “Functional Noise”

Spotify has officially announced its new policy on royalty payments, confirming earlier reports that the platform would be eliminating payments for songs with less than 1,000 annual streams “starting in early 2024.” The announcement also includes new policies intended to curb fraudulent streams and reduce payouts for “functional noise” content.

Spotify says that “tens of millions” of the 100 million tracks in its library have been streamed at least once but fewer than 1,000 times annually, representing 0.5% of the streamer’s stream-share royalty pool. Based on Spotify’s current per-stream rate, 1,000 annual streams generates around $3, often below the minimum that many distributors require before making payouts to artists. Under the status quo, the money Spotify pays out on those songs remains with the distributor until the threshold for payment to the artists is reached. Under the new policy, Spotify will withhold those royalties and roll them into the stream-share pool, now limited to songs with more than 1,000 streams.

Source : Pitchfork