Background information

Less money for small names: musicians take a stand against Spotify

11.12.2023

Translation: Jessica Johnson-Ferguson

Starting from 2024, songs that generate under 1,000 streams per year will no longer receive any money from Spotify. This means artists are missing out on 40 million dollars. They’re now fighting back.

The announcement to change the remuneration system was made by Spotify at the end of November – nicely hidden in a whole series of other measures. The aim is to combat fake streams that are only created to siphon off money. Plus anyone who uploads audio files of whale songs or the sound of the sea will only be paid if the «songs» are played for two minutes or more.

Both measures have been met with great approval in the music industry. That’s unlike the third change made to the remuneration system. Money’s only paid out if a track is streamed at least 1,000 times in one year.

Spotify’s reasoning behind this? The small sums of money don’t even reach the artists in the first place, but are lost to bank fees and transaction costs. A total of 40 million dollars can therefore be redistributed to songs that are streamed more than 1,000 times per year.

Fierce criticism from musicians

Spotify has been harshly criticised by artists for this move. The German Association of Independent Musicians (Pro Musik) has launched an online petition, which already has around 15,000 signatures from all German-speaking countries. The petition not only criticises the redistribution of 40 million dollars to popular tracks, but also the additional obstacles for unknown artists and newcomers.

For example, the remuneration entitlement only kicks in when a song has reached 1,000 streams for the first time. The months prior to that are lost. What’s more, authorisation is tied to a minimum number of listeners. However, Spotify is keeping that number secret.

Pro Musik is also challenging the argument that the money’s lost. They argue there are plenty of ways to make micropayments in the digital age. They add that Spotify’s to blame for the small sums of money, as the system’s unfair as is.

The fact that the announcement was made at such short notice, just a few weeks before the turn of the year, as well as Spotify failing to involve music professionals and associations in the decisions are also being criticised.

«Spotify’s business model is no longer acceptable»

The petition also criticises Spotify in general. It states that instead of taking steps towards fair remuneration for music streaming, the gap between large and small players is widening. However, due to the market power of the Swedish company, artists have no choice. Everyone needs to be on Spotify.

The association Pro Musik and over 50 other associations and artists who’ve signed are calling on Spotify to stop the changes and reform their remuneration model in general. «While we have been criticising Spotify’s business model for years, and justifiably so in our view, a level has now been reached that is no longer acceptable,» the petition states. It goes on to say that it was unacceptable for the industry leader to pay significantly less than the competition.

Pro Musik refers to a website for calculating remuneration, which shows that Spotify pays around 44 dollars for 10,000 streams. Other major streaming services pay artists significantly more. Deezer pays 64 dollars, Apple Music 78 dollars, Tidal 128 dollars and Napster as much as 190 dollars. Only Amazon Music at 40 dollars and YouTube Music at 20 dollars are worse for artists.

This is how little money various providers pay for 10,000 streams.
Source: Screenshot freeyourmusic.com

Swiss performers join the criticism

On request, the Swiss performers’ cooperative SIG (page in German) confirmed that the new Spotify rules are an issue in the industry. «The impact should not be underestimated, especially in the small Swiss market,» says Christoph Trummer, president of SIG and a musician himself. The new regulation also means that more established bands would no longer receive any money for part of their song catalogue.

«We welcome the announcement that more action will be taken against fraudulent streams. But this is the wrong approach,» he says and adds that there are more suitable ways to distinguish «genuine» artists from fraudulent accounts. He also refers to the demand of the European Independent Music Companies Association (Impala).

Impala wants to see the implementation to be suspended, to enable further debate with Spotify on how to protect independent artists, small markets and newcomers. Their proposals include a whitelist for labels and music creators or the inclusion of streams from recent years and the full repertoire for remuneration. Impala is also demanding transparency from Spotify regarding their calculations and clarification of all unanswered questions before the new rules come into force.

Header image: Shutterstock

74 people like this article

Lorenz Keller

Senior Editor

Lorenz.Keller@digitecgalaxus.ch

Gadgets are my passion - whether you need them for the home office, for the household, for sport and pleasure or for the smart home. Or, of course, for the big hobby next to the family, namely fishing.

Background information

Interesting facts about products, behind-the-scenes looks at manufacturers and deep-dives on interesting people.

Show all

These articles might also interest you

Background information
Mainstream monotony in music, part 4: cold hard truths
by David Lee
Background information
Spotify’s finally profitable – but it’s been a long road
by Kevin Hofer
Background information
Spotify: a decision against music?
by Livia Gamper