Spotify demonetises songs with less than 1000 streams
This week, the music streaming giant Spotify demonetised every track on the platform with fewer than 1000 streams. As a result, around 60 per cent of all music on the platform is now non-monetised.
Spotify’s decision to remove monetisation from so many tracks is likely to be pretty controversial. After all, the service is already noted for paying artists less in royalties than rival platforms like Apple Music or Deezer. The new policy will further reduce the rate of royalties Spotify pays out to artists, making its competitors seem much more appealing to artists.
The company has been flirting with this idea for some time now, but it was formally set out in last year’s report, Modernising our royalty system. However, it was not until April the first that the policy was actually put into place. The report states that, in order to generate royalties, “tracks must have reached at least 1,000 streams in the previous 12 months”.
According to Spotify, the vast majority (99.5 per cent) of streams on the platform are “of tracks that have above 1,000 streams.” By extension, you might think that the change won’t have much of an effect if it is only targeting 0.5 per cent of all streams. In reality, though, there are upwards of 62.5million tracks on Spotify that have less than 1000 streams, according to their own data.
Previously, Spotify was noted for paying $0.003 per stream on average. With this new change, the platform argues that it will be able to pay more to the higher-performing songs on Spotify.
In their report, the platform claimed that Spotify will not earn any more money from this policy, with all the saved money being redistributed to artists: “We will simply use the tens of millions of dollars annually to increase the payments to all eligible tracks, rather than spreading it out into $0.03 payments.”
This news comes after a tumultuous few years for the streaming service. In late 2023, the company sacked around 1500 employees (17 per cent of their workforce) due to rising costs and a change in the platform’s strategy. The mass redundancies came as a bit of a surprise, given the record profits achieved by Spotify in 2023, along with a significant boost in subscribers to the platform.
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