Media company and streaming service Spotify from April 1 officially demonetised all songs below 1,000 streams annually .
This is a new policy that could see nearly two-thirds of tracks fail to generate any royalties.
The policy, entitled “Modernising our royalty system” was first announced last year.
This development comes as Daniel Ek, co-founder and CEO of Spotify, responds to claims that the music streaming platform doesn’t reward artists accordingly, insisting that the media company had put over $9 billion back into the music industry in 2023.
With certain musicians voicing out objections to Spotify’s royalty structure and its effect on record sales.
According to them, there will be no “change to the size of the music royalty pool being paid out to rights holders”, rather, “this pool will be divided among the remaining eligible tracks, presumably meaning bigger bucks for a smaller number of artists and rights holders instead of spreading it out into $0.03 payments”.
Spotify service’s song library contains 100 million songs, yet only around 37.5 million of them meet the new threshold to generate revenue, according to data.
Also, in an attempt to tackle fraudulent activity on the platform, the digital music company now requires a minimum number of unique listeners for royalties to be generated, including the length of play-time required for so-called “functional content” (such as white noise) to generate royalty payments has increased.