After 18 years in operation, Spotify will enjoy its first year of profitability in 2024, a feat that was achieved thanks to subscriber growth, reduced spending, layoffs, and price increases. This profitability came at a cost, chiefly at the expense of smaller artists and the employees who built the company’s success.
One such change is the company’s newly instituted payment policy that will see the larger artists on the platform receive the majority of these gains, while the smaller artists may not see anything—or very little—from their streams.
The new policy took effect in April and mandates that tracks must reach a threshold of at least 1,000 streams in the previous 12 months to receive royalties. There are also thresholds for the minimum number of unique listeners.
For those tracks that receive under 1,000 annual streams, they typically generate an average of $0.03 monthly after Spotify takes its share, with larger artists and labels reaping most of the economic benefits of these arrangements.
