The Pop Corporation

Unless you’re a musician, you’re probably not that bothered about Spotify’s royalty rates – but maybe you should be. See, the convenience of Spotify is absolutely unparalleled, and most people now have an almost endless library of music in their pockets, so you can listen to huge catalogues of music on the commute.

But what if all your favourite new bands stop putting their releases on the platform? What happens if all the brilliant future talent decides that it isn’t even worth using as a promotional tool? Founder Daniel Ek is reportedly worth billions, and your favourite new band with a million plays is still on a zero hour contract in a pub.

There’s a disparity and there’s been rumblings of discontent for a while.

And those are going to continue as Spotify intends to look at it’s royalty payout model in 2024, and obviously, they don’t appear to be looking at making royalty rates better for small bands.

One change is that Spotify are going to introduce a new model that includes a minimum threshold of streams for a song to qualify for any royalties at all. There’ll be penalties for fraud, and they’re going to restrict short ‘noise’ tracks.

If they employ the algorithm and AI to ‘decide’ what constitute ‘short noise tracks’, there’s going to be feathers ruffled, especially if you’re a band with interludes or, maybe you’re a hardcore band that makes short, sharp white noise punk.

Of course, there’s the smaller matter of people making music with AI programs, which is a whole other casserole to try and scrape off the floor.

One of the reasonings behind this is that, back in the ’80s, there’d only be a few thousand releases in a given year, but with the advent and ease of uploading et al, Spotify are getting around 120,000 new tracks uploaded per day. In pure business terms, they won’t want to be paying out for everything uploaded – however, if an artist is owed royalties, the company should pay them if they’re on their platform and they’re being listened to. You can’t level the playing field and then complain about it.

Naturally, there’s the small matter of Spotify paying higher royalty rates to big artists compared to smaller ones. It’s one of the maddening things about the company – they also favour bigger acts with suggestions in the algorithm, and pay less than their competitors Apple, Amazon Music and Tidal.

On Spotify, a new act sees their exposure being dimmed with diminishing returns. Big companies complain that their previous pole position has been diluted, while newer acts feel like they’re kicking water uphill. And are ‘non’ music uploads making it difficult for everyone else, or is it fair game to scam the system?

So. The changes.

Spotify won’t be paying out to tracks that don’t hit a certain amount of streams (unspecified at present), and there appears to be call of a penalty for tracks that are uploaded in ‘bulk’ (again, unspecified amount at the time of writing), and the knock-on Spotify hope, is that there’ll be less non-music tracks uploaded, so Spotify can save money on storage costs. And they’ll pass the savings onto musicians? Don’t hold your breath.

Basically, they’re going after the bots, it seems. Reports suggest that up to 3% of uploads on music streaming platforms are ‘fake’, or fraudulent, but it existing artists are penalised for a problem that amounts to 3%, then we’ll have a problem. There’s going to be a minimum listening time limit too.

Major labels are pushing Spotify for a pro-rata version of royalties, where all funds are put in a bucket, and those are shared to artists in accordance to the proportion of plays it has in that big bucket. This again, is something that favours bigger acts.

It’s complicated. It’s irritating. We’ll have to wait and see.

It’s clear that, if you want to make money in music, be the middle man.