Music News - BPM Supreme Contributor - May 3, 2024
2024 Spotify Royalty Changes: What Artists Need to Know

As of early 2024, Spotify’s royalty payout structure has changed. You now have to earn a set amount of streams in order to qualify for royalty payments, which has understandably raised some eyebrows across artists and the music industry at large. 

We’ll unpack everything you need to know about these recent Spotify changes below and break down the main tenets behind this policy shift as expressed by the streaming platform.

TLDR: Spotify Has a New 1,000 Stream Threshold For Royalty Payments

To cut to the chase, Spotify has implemented a new 1,000 annual stream threshold in order to earn royalties on its platform, as outlined in this post. This means that each song posted on Spotify must receive 1,000 or more streams over the past 12 months to start generating royalties. The new policy applies to both catalog tracks and new releases.

Understanding Spotify’s 2024 Royalty Changes 

So, why are these changes coming about? As said by Spotify, these new policies intend to address the following, “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.” We’ll unpack each of these stipulations below: 

Capturing Payment for “Professional” Musicians

There is no denying that Spotify hosts a lot of music – with well over 40,000 tracks uploaded to the platform daily, it can be increasingly difficult to discover new artists. It could also mean that payments are being distributed further across more parties, which theoretically, could lead to smaller payments for artists since the royalty compensation is dispersed across more sources.

In Spotify’s words, “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.”

Spotify supposes that instead of providing more minuscule payments to all artists, it’s more beneficial for those further along the road to receive large payments, as this tier of artists is more likely to bet more of their livelihood on art. Whether that positive change is reflected in mid-tier artists’ royalty payout remains to be seen following the initial period of this implementation. 

Artificial Streaming: Combating Fraud

Spotify’s new policy is intended to better detect fraudulent streams, which can run rampant on the platform, taking away royalties for true streams. Labels and distributors will be fined when artificial streaming is detected. Spotify has also established the Music Fights Fraud Alliance

New Noise Track Requirements

Creators of white noise, fan sounds, and other ambient noise tracks designed for primarily passive listening will now have to create tracks at least two minutes long to be eligible for monetization. While the exact details have yet to be determined, Spotify also plans on reducing the royalty rate for noise track creators writing, “We’ll work with licensors to value noise streams at a fraction of the value of music streams.” 

How Much Do I Earn From a Spotify Stream?

Since money is “pooled” on Spotify’s platform, streaming royalty rates vary based on genre, engagement, and other unknown factors. Therefore, there is no standard Spotify royalty rate, though it’s estimated between $0.003 – $0.005 per stream on average, which can be split amongst the artist, distributor, and label depending on your distribution model. 

It’s also worth noting that Spotify has introduced programs like Discovery Mode, which allow artists to voluntarily forgo a percentage of royalties in order to enhance their discoverability on the platform. 

What Should I Do About the Spotify Royalty Changes?

There is no easy answer to this question, as the answer varies depending on your standing, output, and level of listenership as an artist. As explained above, since money is pooled across Spotify, every artist could potentially have a different royalty rate based on any number of undisclosed factors. 

One thing is for sure though across the board for all beatmakers, instrumentalists, songwriters, and musicians – it’s important to cultivate a fanbase independent of any single platform to have a sustainable career in music. Expanding your horizons past Spotify is essential; whether that means playing out live more often, collaborating with new artists, or getting your songs in front of DJs using BPM for Artists

Learning how to market yourself and build beyond streaming and social media platforms is key. At the end of the day, Spotify, like all other streaming outlets, can opt to shift discoverability algorithms and royalty qualifications, as showcased through the 2024 updates. 

Diversifying your income as an artist enables you to play the long game and keep releasing, even through the ever-changing dynamics of streaming platforms. Spotify’s 2024 updates are undoubtedly challenging news for independent, emerging artists, but learning how to roll with the punches has always been a part of the journey for working musicians. 

About the Writer
Kate Brunotts is an audio engineer and music producer from New York City. When she’s not writing about music, producing music, or singing and songwriting, Kate helps others realize their unique sound, whether through a fresh mix, new instrumental approach, or total rework of a particular sound.
Related News