January 4, 2023
Spotify lowers payouts to artists, while making record profits.
Already, the streaming service has been scrutinized for how little it pays the artists on its service, and now that is about to get a whole lot worse for the little guy.
Sometime in early 2024, Spotify will be eliminating payments for songs with less than a thousand annual streams. While the service claims this is to prevent people that artificially inflate their numbers in a bid to increase the amounts paid out to them by the service, it looks more like a scheme to pay nothing to small independent artists that are at the early stages of their careers. As it stands, Spotify pays artists between a measly $0.003 – $0.005 USD per stream, and now those numbers are about to get even more ridiculous.
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If we do the math, the streaming service pays out just $4 USD for a thousand streams. If we super-size those numbers, that’s a poultry $4000 per million streams. The average band has four members, meaning that each band member would earn just a thousand dollars on every million plays. But wait – not so fast. These numbers aren’t pure profit, as things like studio time and promotion have to come out of these numbers as well.
There’s more – depending on the deals artists have with their record companies, these streaming payments would first be filtered through the record company before what’s left trickles down to the artists.
Meanwhile, Spotify had its best year since 2018 in 2023, and is now worth $40.13 Billion USD. At this rate, an artist would require 10,400,000 streams per year to earn a minimum wage income, based on a minimum wage of $15 per hour. Numbers that just don’t add up. The entire music streaming industry in general, underpays the artists on their platforms, with Spotify being the largest music streaming service with 574 million users. Installing new ways not to make pay-out’s to artists just feels gross.
Spotify’s new regulations can also be seen as an attack of sub-genres such as Grindcore, Punk and Hardcore tracks that have a running time of less that two minutes. Previously, a track with a running time of thirty seconds was the minimum needed to qualify to earn a fraction of a penny, but the company’s new policy states that anything under two minutes will not be eligible to earn anything at all. With a lot of sub-genres artists producing tracks way less than that mark, many will surely feel the pinch of these new regulations.
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Also in the firing line, are what Spotify refer to as “functional noise recordings” – and the service plans to clamp down on such recordings. Where that leaves experimental artists from genres such as Harsh Noise and Dark Ambient is yet to be known, but it seems that in order to survive on the Spotify platform, artists will have to rethink their approach to their art.
Spotify claims that the reason for these changes is to reduce the payments made to artists the service claims uses bots and AI to pump up their numbers. As well as to target users that place short clips into playlists thus inflating their plays.
