Spotify’s Royalty Model is Changing with More Eligibility to Earn from the Streams

Isaiah Richard, Tech Times 26 October 2023, 01:10 am

While still being among the top streaming platforms in the world, Spotify has developed the app into a place that fosters talent, but that could soon change as there are reports citing the change to its royalty models in the future. Music streaming platforms are known for paying royalties to where they are due, but in the latest report, there is more eligibility to qualify for earning.

Spotify's Royalty Model is Changing, Asking for More Eligibility

(Photo : STEFANI REYNOLDS/AFP via Getty Images)

Music Business Worldwide (MBW) has reported that Spotify is looking to shake things up in the platform, with the biggest and most controversial change coming to its royalty model. The latest change would raise the eligibility needed so that artists may earn from the platform and users that play their music.

There is a minimum threshold of annual streams for a track before it can earn from royalties, and according to the report, this change would push to a requirement to earn 5 cents per month or 200 streams per year.

Failing to meet the quota means that the pennies they earn would head to the "streamshare pool," and instead be distributed to other "larger artists" who would get a more sizeable sum from this pool.

While the pennies may not sound a lot, multiplying them over multiple tracks could mean tens of millions of dollars.

Other Changes in Spotify is Also Coming

According to The Verge, Spotify will also bring other changes including fining music distributors and labels for fraudulent activity on their tracks. On the other hand, Spotify will also change the minimum runtime of noise tracks (like static noise, rain sounds, background music, etc.) before they can start earning royalties from the platform.

The current eligibility on Spotify only requires 30 seconds of playtime for each track to earn, and some artists break it down to 31-second tracks to earn more.

Spotify and its Developments

Apart from Spotify being a music streaming platform, it has also become a social networking experience for many, where they can connect with friends, acquaintances, or even strangers. The new feature called Spotify Jam will allow connected users to share a single Now Playing stream, and different users may choose to add to the queue, contributing their music suggestions into one.

There is also the Spotify Daylist, a new service that helps users get the best out of their streaming experience, with the platform deciding the music they would hear based on their mood. It will also depend on the time of day, with the platform learning about what users are streaming at certain times or moments, and then creating their "Daylist" to match how they are feeling.

Indeed, Spotify is an established name in the industry, but it is still centering on various changes on the platform to help improve the streaming experience, but not all are well-received by the world. The latest and most controversial change would be its royalty model, and it could render those who have low streams to not receive what is due, as well as get a smaller share from the pool, should it roll out next year.