Spotify is preparing to introduce significant changes to its royalty model in the first quarter of 2024. Such intentions of the streaming service are reported by Music Business Worldwide.
Implementation of the plans will allow the company to allocate $1 billion over five years in favor of “legal” artists and rights holders.
For several weeks, Spotify has been discussing changes to its royalty model with various music rights holders. According to informed sources, the streaming service is preparing three significant changes to its model.
First, the company wants to introduce financial penalties for music distributors, including labels, for fraudulent actions in relation to the music they upload to Spotify.
Another change is the introduction of a minimum duration for non-musical tracks that reproduce noises, such as rain, etc. Now, any track on Spotify starts receiving royalties if it is listened to for more than 30 seconds. So often, noise tracks are split into quite short tracks, thus cheating the system. It is not yet known what the minimum duration of non-musical tracks will be.
The third change concerns the number of times a track is played per year. It is planned to introduce a certain minimum threshold before a track starts generating royalties on Spotify.
By the way, it has recently become known that Spotify gives 15 hours of free audiobooks per month to its Premium subscribers. Since October 4, premium subscribers have been able to access more than 150 thousand audiobooks at no extra charge. Currently, Spotify users in the UK and Australia are eligible.