It’s Official: Songs Need 1,000 Streams To Earn Royalties Via Spotify.
“As expected, Spotify unveiled its updated streaming payment policies for artists and labels on Tuesday morning, and they are essentially the ones that have been previously reported in recent weeks: efforts to cut down on fraudulent streams; increasing the minimum payable track length for what is called “noise” content (the often-cited “rain falling on a rooftop” recordings); and eliminating payment for songs with less than 1,000 streams.
The company claims the updates will drive an additional $1 billion toward artists, by re-directing the payments that had previously gone to fraudulent streams, noise content or distributors that do not distribute royalties below a certain amount.
While there has been significant uproar around the last element in particular, it should be noted that 1,000 streams generates an average of $3 annually in royalties, while many distributors do not distribute such low amounts — which means that money remains with the distributor. While those amounts are very small for the average artist, added up across thousands of artists per year, it’s a substantial total. Spotify also claims that just .5% of all tracks have less than 1,000 streams. (Head here for an analysis of what Spotify’s payment updates really mean.)
Relevant excerpts from the announcement, which can be found in full on Spotify’s blog, appear below.
As the royalty pool and catalog on Spotify have surged, three particular drains on the royalty pool have now reached a tipping point. So, we’re working in close collaboration with industry partners — artist distributors, independent labels, major labels, label distributors, and artists and their teams — to introduce new policies to (1) further deter artificial streaming, (2) better distribute small payments that aren’t reaching artists, and (3) rein in those attempting to game the system with noise. While each of these issues only impacts a small percentage of total streams, addressing them now means that we can drive approximately an additional $1 billion in revenue toward emerging and professional artists over the next five years.” – Variety.com
