Spotify Royalty Payout Changes

This week Spotify has publicly announced some significant changes to their royalty model, and we encourage you to view the Spotify royalty terms in this article here: https://artists.spotify.com/blog/modernizing-our-royalty-system

These are the most significant changes to Spotify’s royalty structure since its launch in 2008.

We expect these changes to go into effect in early 2024, but in light of these, we are required to make updates to our distribution policies, which we have outlined below. 

Spotify will be charging distributors like Allot Lines a financial penalty on a per-track basis for tracks where streams are deemed to be fraudulent (levying charges of a fee of 50 USD per month per track if they conclude that more than 90% of its streams were generated artificially). We already invest heavily in detecting, preventing, and removing tracks that impact artificial streaming, and we take a zero-tolerance policy towards this behavior. We will continue to remove music from streaming platforms if there is evidence of artificial streaming.

We do not recommend any artists engage in paid third-party playlisting services that guarantee streams, as this is a surefire way to get flagged for stream manipulation. For more information, please read this link: https://support.spotify.com/us/artists/article/third-party-services-that-guarantee-streams/

Even artists who play their own music on repeat may get flagged, and we do not recommend this. 

To further combat artificial streaming, our quality control process is being reviewed, and Allot Lines will not distribute any music from user accounts that we consider to be at high risk of streaming fraud. This includes:

• Generic instrumental releases for artists that do not have artist profiles or a web presence.
• Accounts that are uploading generic releases under multiple artist names.
• Releases that are predominantly AI-generated or impersonating the likeness of another artist using AI.

Starting in early 2024, tracks on Spotify must reach at least 1,000 streams in the previous 12 months in order to generate royalties.

For more information on this, please CLICK HERE. Please be aware there are also minimums on the number of unique users, so artists who repeatedly stream their music to reach the 1000 stream minimum will still not qualify for payment (but may attract a fine for artificially streaming).

Please note the 1,000-stream threshold is on a rolling 12-month basis and is recalculated each month (not per calendar year). Streams that are below the threshold in previous months do not get back-paid once the 1,000-stream threshold is reached - only streams from the applicable month will be counted in the royalty calculation. Below is an example from the Spotify website:

We are currently analyzing and reviewing the impact of this new threshold on our catalog, and our support team is available to answer further questions or concerns. 

Functional content is defined as ‘non-musical’ audio, and examples of such material might be ambient/environmental (nature) sounds, white/brown noise, and singular frequency audio, or ASMR. Spotify will completely demonetize all functional audio under two minutes in length and heavily reduce the royalty payable on monetized streams over two minutes.

In preparation for these commercial changes, we are implementing interim measures effective immediately:

• We will cease delivering 'functional content' and non-music audio where the majority of the album consists of this content.
• We are reviewing the parts of our catalogue that feature ‘functional content’ and will reach out to users on a case-by-case basis to discuss the status of your repertoire. 

The Allot Lines team appreciates that these changes may have a significant impact on some customers, and our support staff are available to answer any questions or concerns you have about these updates. Please reach out to [email protected] to contact the team.