A new year often brings change and for songwriters, 2024 is no exception. As reported, songwriter royalties are set to see a cost-of-living increase from 12 cents in 2023 to 12.4 cents in 2024. This increase marks the first of its kind following last year’s significant agreement to begin raising the rate annually.
While at first glance, this adjustment might appear as a victory for songwriters, it’s essential to understand the broader context. Specifically, the implications of Spotify’s recent changes to its royalty distribution model.
Spotify has claimed that their updated model will drive an additional $1 billion in revenue towards “emerging and professional artists” over the next few years. However, critics argue that this isn’t so much generating new revenue as it is redistributing existing earnings.
Under Spotify’s new policies, tracks earning fewer than 1000 streams in a year will not generate any streaming revenue. Instead, this money will be funneled towards the more popular artists. In essence, the revenue from lesser-known or niche artists is being shifted to those already experiencing success on the platform.
While this change may indeed lead to increased earnings for some, it also risks marginalizing a large body of artists. These artists, many of whom rely on every stream’s income, could see their earnings decrease significantly.
In conclusion, while the increase in per-stream royalties is a step in the right direction, the changes in how these royalties are distributed have raised concerns. As we progress through the new year, it remains to be seen how these changes will impact the broader music industry and whether further adjustments will be made to ensure equitable compensation for all artists.
