Spotify plans to pay less popular artists less money for streams

Spotify is planning to pay small artists on its platform less for their streams, according to Music Business Worldwide. Its royalty payout model is reportedly getting a makeover with three major changes the digital music giant is planning to roll out for the first quarter in 2024.

First, Spotify  (SPOT) - Get Free Report is allegedly planning to enforce a minimum threshold of annual streams that artists have to hit before their song earns royalties on the platform, but what the minimum will be is currently unspecified. Spotify's goal with this move is to demonetize a portion of tracks that absorb 0.5% of its royalty pool.

Related: Spotify Close to Sealing Licensing Deals with Major Record Labels

Currently, Spotify generally pays artists an average of $0.003 – $0.005 per stream. If an artist hits 500 streams in a month, for example, they are estimated to receive around $2.00 in royalties from the platform. Also, 70% of revenue goes to the artist and 30% goes to Spotify. With a minimum on the number of streams imposed on artists in order to generate royalties, smaller artists would get the short end of the stick.

Other changes that Spotify allegedly plans to make include enforcing a minimum on the amount of play-time each non-music track, such as ambient background tracks, receives in order to gain royalties. Also, the platform plans to start punishing record labels and other music distributors for fraud that’s detected in their music.

Some independent artists have already reacted negatively to the news of the upcoming changes, with some even floating the idea of starting a strike similar to Hollywood’s actors and writers strikes.

Or maybe @Spotify could just just pay us better royalties so independent artists could actually make a living.