Why don’t songs with less than 1,000 annual streams earn recording royalties on Spotify anymore?

Mar 18, 2024

In November 2023, we announced a set of new royalty policies coming to Spotify in early 2024, aiming to direct an additional $1 billion to emerging and professional artists over the next five years.

One of the new policies is that tracks that don’t have at least 1,000 streams in the past year will no longer generate recording royalties on Spotify. Spotify makes no additional money under this model, and the policy has no impact on the total size of the music royalty pool paid out by Spotify.

This policy targets the population of tens of millions of tracks on Spotify that generate only $0.03 per month on average. In the aggregate, these tracks with under 1,000 annual streams represent 0.5% of total streams (and therefore 0.5% of the total royalty pool). Now that Spotify’s royalty pool has become so large — $9B+ in 2023 alone — 0.5% is now a material amount, around $40 million.

In developing this policy, our focus was on making sure as much money as possible reaches the people our platform is built to serve, emerging and professional artists. Because labels and distributors require a minimum amount to withdraw (usually $2-$50 per withdrawal), and banks charge a fee for the transaction (usually $1-$20 per withdrawal), this money often doesn’t reach the uploaders. And these $0.03 monthly payments are often forgotten about.

We believe it’s more impactful for these tens of millions of dollars per year to increase payments to those most dependent on streaming revenue — rather than being spread out in tiny payments that typically don’t even reach an artist. 99.5% of all streams are of tracks that have at least 1,000 annual streams, and each of those tracks will earn more under this policy.