Spotify’s latest announcement regarding adjustments to its royalty model is causing consternation among smaller and independent artists as the music platform suggests a minimum streaming threshold to be met for any royalty payments. Now Kristin Graziani, president of music distribution platform Stem, is providing insights into the proposed changes.
As Graziani wrote in an op-ed for Consequence, while some accuse Spotify of favoring already established artists, these reforms appear to benefit growing artists based on the early details shared.
According to the rules for 2024, all tracks must achieve a minimum of 1000 streams within a year to qualify for royalties, distributors and labels will face penalties for delivering content responsible for fraudulent streams, and functional tracks, such as white noise, will have distinct royalty qualifications compared to music tracks.
Graziani says redirecting funds from low-streaming content can potentially amplify the royalty pool by $40 million annually. Simultaneously, penalties for fraudulent streams will help in channeling genuine royalties to artists. The intriguing aspect of these policies is their potential positive impact on career artists.
A unified approach is crucial for the music industry at this juncture, she says. Eliminating fraudulent practices is beneficial not just for individual artists but for the collective ecosystem. With these changes, artists could witness an additional billion dollars in the royalty pool in the upcoming five years. However, Graziani emphasizes the continued need for industry evolution and advocacy for artist rights.
