Spotify's habit of paying artists next to nothing has been well-documented over the years. But for super small artists, it might get even worse very soon.
According to Billboard, Spotify is currently planning a new payment structure that "will de-monetize tracks that had previously received 0.5% of Spotify's royalty pool." This seems to be partially in reaction to companies uploading 31-second tracks of white noise or non-music tracks in order to game the system and collect royalties, but there's no way this new structure doesn't also affect smaller artists trying to get by.
A separate report by Music Business Worldwide notes that Universal Music Group, as well as a handful of other major labels, have been in talks with Spotify to figure out a new payment system. The new system will cater toward established artists and labels, with the biggest change being that any track will need to hit an annual streaming minimum before being eligible for royalties. So essentially, you can be popular enough to keep Spotify going as a platform, but not popular enough to be paid. Fuck that.
Spotify previously rolled out a brand new Showcase feature, which charges artists to promote their music as a paid banner advertisement at the top of Spotify’s Home to what they're calling "likely listeners across Spotify." Of course Spotify positions the home page as the "most visited place on Spotify, where millions of listeners come to decide what to listen to, resulting in billions of streams each day," and then mention "people who see a Showcase are 6x more likely to stream the promoted release."
But how is this bleeding artists dry? Because getting your music featured on Showcase starts at $100 and is priced on a cost-per-click (CPC) basis starting at a $0.40. So one click on your music costs you $0.40, and you'll make roughly $0.005 in royalties per listen. I'm sure you're seeing how this math absolutely does not work in your favor. Basically, you'd need every single person that clicks on your ad to stream your brand new album or single way more times than they're probably going to in order to turn a profit.
Spotify further points out in their press release that artists must have at least 1,000 streams over the past 28 days in at least one of the available target markets to be eligible to use Showcase, and the artist team’s billing country must be set to the U.S.
My cynicism over this new feature stems from a lot of stories we've run in the past. For starters, there were over 100,000 tracks uploaded to Spotify every single day back in October 2022 – a number that has since grown, and most songs are going unplayed anyway. So the room is only getting more crowded. Then there's the fact that almost no DIY artist is making anywhere close to a reasonable amount of money from their music, and it's only getting worse. Doubly so as Spotify sees that there's more competition and offers even lower royalty rates for promotion.