Spotify confirms new royalty policy, eliminating payments for tracks under 1,000 streams

Spotify has confirmed details of its new royalty policy, which will get rid of payments for tracks under 1,000 streams.

The move forms part of the company's commitment to tackling what it describes as "payments lost in the system", namely the "tens of millions of tracks that have been streamed between 1 and 1,000 times over the past year" and generate on average just $0.03 per month.

According to Spotify, due to the minimum transaction requirements set by many labels and distributors (usually $2-$50 per withdrawal), and bank fees (usually $1-$20 per withdrawal), these nominal payments are often held by third party aggregators and don't reach the pockets of the uploaders. However, they can collectively make up $40 million per year.

Spotify says that it plans to reallocate the stream-share by increasing the payments afforded to eligible tracks. Tracks will now need at least 1,000 streams in the previous 12 months to be included in the royalty pool calculation. The streaming giant aims to "drive approximately an additional $1 billion in revenue toward emerging and professional artists over the next five years".

As hinted at last month, Spotify will also target "functional" non-music noise with several new policies, including increasing the minimum track length of these recordings to two minutes, in order to be eligible to collect royalties. You can read about Spotify's policy changes in depth here.

Meanwhile, a spokesperson for Spotify confirmed to Music Business Worldwide on Monday (20th November) that it will "fully cease" streaming in Uruguay after the country's Parliament approved an amendment to its copyright law put forward by the Uruguayan Society of Performers (SUDEI) earlier this year. The amendment to Article 285 of the country's copyright law will now include the 'right to a fair and equitable remuneration’.

Last month, details of Spotify's Super Premium subscription service were leaked.