When you thought you had Spotify all figured out, they changed the game. As of April 2024, Spotify has updated its Spotify royalty policies, and if you haven’t been sifting through their terms and conditions, here’s the lowdown.
The TL;DR:
Spotify now requires each track to achieve at least 1,000 streams within a 12-month period to qualify for Spotify royalty payments. Additionally, they’re cracking down on fraudulent streaming practices and imposing stricter rules on non-music noise tracks.
What Does This Mean for Indie Artists?
1. 1,000 Annual Streams Threshold
To earn Spotify royalties, your track must garner a minimum of 1,000 streams over the past year. While this might not be a hurdle for established artists, emerging indie musicians could find this challenging. Considering Spotify’s per-stream payout ranges from $0.003 to $0.005, missing this mark means forfeiting potential earnings. Spotify estimates that 99.5% of all streams are of tracks with at least 1,000 annual streams, and each will earn more under this policy. (Spotify for Artists Blog)
2. Non-Music Noise Tracks Regulation
Tracks categorized as non-music noise now need at least two minutes long to qualify for Spotify royalty payments, with each play counting as one-fifth of a music track’s stream. This move aims to ensure that revenue is directed towards traditional music content.
3. Crackdown on Streaming Fraud
Spotify is enhancing its anti-fraud measures to detect and penalize activities like bot-generated plays. Distributors found with 90% or more fraudulent streams will face charges, ensuring a fairer distribution of Spotify royalties. (Spotify Support)
This Shifts The Royalty Pool Forever
These changes have raised concerns among indie artists who may struggle to reach the 1,000-stream threshold, potentially widening the gap between emerging and established musicians. Billboard notes that this policy could affect over two-thirds of Spotify’s song catalog, shifting about 0.5% of the Spotify royalty pool—approximately $46 million in 2022—to more popular tracks. (Music Business Worldwide)
Streams Are Good, But Fans Are GOLD
Here’s the truth: streams are great, but fans matter more. Real, engaged listeners who care about your music are the ones who will support you long-term. While hitting 1,000 streams per track to qualify for Spotify royalties is essential if you want that extra pocket change, building a loyal fan base is what will sustain your career.
- Focus on engaging your fans and creating a relationship with them.
- Prioritize growing your audience both online and offline.
- Use Spotify as one piece of the puzzle but don’t rely on it for your income.
While we love Spotify and see playlists as a piece of the puzzle for indie artists growing their careers, we’ve always said it’s not the whole picture, and this new change only solidifies that. In the meantime, continue working on your overall Spotify strategy, as well as your fan-building strategy. Your fans will always be your biggest advocates and the ones to truly make your career, so staying focused on them and growing that relationship will always serve you best!
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