Shownotes
This week we talk about how Spotify's royalty changes will affect artists in 2024 and what the resulting outrage says about the false narrative much of the industry is living.
In this episode, you'll learn about:
- Spotify's Royalty Changes
- Monetization Requirements
- The Dangers of Focusing on Public Facing Metrics
- What to Do about the Royalty Changes
- Why the Story You Believe About Yourself May Be Holding You Back
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Credits:
Guest: N/A
Host: Travis Ference
Editor: Travis Ference
Theme Music: inter.ference
Transcripts
Just when you thought streaming royalties couldn't get any worse, Spotify pulls
Speaker:a hold my beer move and tells us that our music may no longer earn
Speaker:royalties. But as bad as it all sounds, I think this may be an opportunity
Speaker:to change the way we think about this business.
Speaker:You so in case you've somehow missed the
Speaker:hundreds of articles and videos talking about Spotify's royalty changes, here's a quick rundown
Speaker:of what's changing. There are three main changes to Spotify's
Speaker:royalties. One, they're instituting a penalty fee for
Speaker:tracks that are found to be using artificial streaming. Now, if you're unfamiliar,
Speaker:there are entire bot farms streaming third party playlists
Speaker:24 hours a day. I think at this point, any serious artist
Speaker:should know that paying for playlist placements, especially on a
Speaker:bot playlist, does far more harm than good. So I think it's safe
Speaker:to say that we shouldn't have any issues with this change. The second change is
Speaker:in regards to what Spotify calls functional genres, I. E.
Speaker:Noise recordings. People have long been taking advantage. I
Speaker:use air quotes on that one of the rise of things like ocean sounds and
Speaker:white noise being played while people sleep on loop. I don't personally have an
Speaker:issue with people putting up non musical content, but I do agree with the changes
Speaker:Spotify is making. What they're doing is increasing the minimum track length for
Speaker:these functional genres up from 30 seconds to 2 minutes. They also
Speaker:intend on working with licensers to reduce the value of a noise stream
Speaker:versus a music stream. Now, at first glance, you might feel that this
Speaker:is taking money out of the pockets of creators, and that is technically
Speaker:true. But if you're an actual musician creating art, you know that you spend
Speaker:days, if not weeks, on a track. These noise tracks can be made and
Speaker:uploaded in a matter of minutes. So I think we can all agree
Speaker:that the more money going into the pile of royalties being distributed to real
Speaker:artists, the better. And speaking of royalties distributed to artists,
Speaker:that brings us to the third and most important change track
Speaker:monetization eligibility. Starting this year, a
Speaker:track must have reached at least 1000 streams in the previous twelve months
Speaker:in order to generate recorded royalties. What happens to the money that would
Speaker:have been earned by those tracks that don't meet the threshold? Well, to cite the
Speaker:Spotify website quote, Spotify will not make additional money
Speaker:under this model. There is no change to the size of the music royalty pool
Speaker:being paid out to the rights holders from Spotify. We will simply use the tens
Speaker:of millions of dollars annually to increase the payments to all eligible
Speaker:tracks rather than spreading it out into three cent payments, end
Speaker:quote. The unfortunate part of that statement is that Spotify had to put into print
Speaker:how pitiful the payout to artists already is. Now, part of Spotify's
Speaker:reasoning behind this is that many distributors have payment thresholds that must be met
Speaker:before royalties are even paid to the actual rights holder. I believe CD
Speaker:baby, for example, has a threshold of $10, while ditto plus is a whopping
Speaker:150 british pounds. That should be criminal. They are literally
Speaker:keeping your money for months, if not years, maybe forever.
Speaker:So since tracks with less than a thousand streams are definitely not
Speaker:meeting a lot of these payment thresholds, Spotify has decided that money is better
Speaker:served going into the royalty pot for tracks that are, quote,
Speaker:monetized, which by their calculations would increase payouts by nearly $1
Speaker:billion over the next five years. I honestly don't know where I personally want to
Speaker:stand on this because if this change actually results in real independent
Speaker:artists making more money, I think that's great.
Speaker:But it is setting a very bad precedent for artists not
Speaker:being paid for their art. Even though we're talking about potentially single digit
Speaker:dollars or less, you're still making it okay
Speaker:to devalue someone's work, which I am not cool with.
Speaker:Obviously there's been an outcry of frustration with these changes, everything from people calling for
Speaker:Spotify boycotts to threatening to cancel their subscriptions. So that brings us to the part
Speaker:of this video that's going to be nothing like any other video you've seen on
Speaker:this topic because this is progressions, and deep down inside, this is secretly a
Speaker:self help podcast. Now, before you say, travis, what right do
Speaker:you have to talk about releasing music? You're just a mix engineer.
Speaker:And I have in fact been involved in releasing several
Speaker:projects to varying degrees of success. And let's not
Speaker:forget that I've been putting this podcast out into the world for more than
Speaker:three years now. Now, it might not be music, but trust me, I felt
Speaker:all the ups and downs and had all the thoughts of quitting that every musician,
Speaker:artist and producer watching this may have had at one point. When I see the
Speaker:reaction to Spotify's decision, there are two things that if we changed about
Speaker:ourselves, then I think the industry as a whole would be better off. First is
Speaker:this obsession over forward facing metrics. We're focusing
Speaker:on the wrong things. Spotify's choice to make the stream threshold
Speaker:1000, I think, has triggered a lot of people because the
Speaker:dreaded less than 1000 sign has already plagued so many
Speaker:of us. Releasing a song and not passing 1000 streams has for
Speaker:years been such a blow to an artist's confidence. Now, ultimately, I
Speaker:blame social media for this. The like has become a forward
Speaker:facing metric for how good something is. It's truly unfortunate that this is
Speaker:where the world is at, but this is where we are. I'm sure that it's
Speaker:not a coincidence that Spotify opted to have a similar public
Speaker:metric by displaying the stream count. Think about what that's done for their marketing and
Speaker:branding. Artists sharing their year end streams, announcing that they hit their first
Speaker:million. Do you see anybody posting about getting a million streams on Apple? No. The
Speaker:world has us so focused on these public metrics that we forget that
Speaker:this is a long journey. It takes time to build a fan base. A career
Speaker:is the compounding effect of everything we do. It's not just one song. And
Speaker:that goes for whether you're an artist, releasing music or behind the scenes in the
Speaker:production process. I feel this all the time. I want a project I work on
Speaker:to blow up as much as the artist does. So we should all be taking
Speaker:pride in the work we're doing, focusing on the enjoyment we get from making the
Speaker:things we're making and not on the number of streams or likes it has. Let
Speaker:me ask you this. Does 1001 make you feel better than less than
Speaker:1000? Let's not forget that less than 1000 could be
Speaker:999. Is it different? No, it's not. Your stream
Speaker:count is not a reflection of the quality of your music. It's a reflection of
Speaker:how many people have heard your music. You can't get caught up on the results.
Speaker:You've got to focus on the process. I talk about this on the podcast all
Speaker:the time. That's what brought you into music in the first place, right? The process
Speaker:of making music. Now that we've shifted our focus a bit away from these metrics
Speaker:that we all seem to want to live or die by, let's talk about how
Speaker:we identify what's the narrative that we've painted for ourselves. Right now
Speaker:it feels like we've painted the story of the starving artist that is being kept
Speaker:down by the big corporate DSP devils and pushed to the wayside by the major
Speaker:label artists. And look, that's not an entirely
Speaker:exaggerated description of the challenges of breaking through in the music industry.
Speaker:But that doesn't mean we should believe that's who we are. Our experiences all
Speaker:shape our story. If we let the setbacks and mistakes define who we are,
Speaker:then we'll become a self fulfilling prophecy. Example. If you identify
Speaker:as someone who fails to market their music effectively, then you won't take any
Speaker:steps to learn how to market your next single any better than your last. On
Speaker:the other hand, if you identify as a person that grows from hardship and
Speaker:is excited to learn how to beat a new challenge, you will eventually
Speaker:crack that code. And look, this stuff is hard. I promise you that I'll be
Speaker:tracking the views and downloads on this episode nonstop for the next week,
Speaker:despite the fact that I just told you to ignore all that. And while I'm
Speaker:doing that, I'll be trying my best to continue to identify as someone who is
Speaker:growing a podcast and is excited for the challenge to win people over one
Speaker:by one. But I will 100% have
Speaker:moments of absolute frustration. And by the way, this is a great moment
Speaker:to hit the subscribe button. So think of the artists that inspire you. Now we'll
Speaker:never know what they believed about themselves when they were starting out, but I think
Speaker:it's pretty safe to assume that none of them believed that they would never cross
Speaker:a thousand streams. There was an artist in the UK who was playing hundreds of
Speaker:gigs a year, self releasing his own albums, collaborating with as many musicians
Speaker:as he could, and building an audience on YouTube before he finally broke through.
Speaker:When he did, he hit number one on iTunes as an unsigned artist, and
Speaker:would eventually become the first artist to have a song hit 1 billion streams on
Speaker:Spotify. We're obviously talking about Ed Sheeran. Despite the many setbacks I'm
Speaker:sure he encountered, I would imagine that the story he believed about himself
Speaker:was always that he would be a successful musician and
Speaker:songwriter. You can't put that amount of work in unless you truly believe
Speaker:that that is your story. So let's return to this Spotify royalty nonsense. What are
Speaker:you going to do differently with your music career because of it? Nothing. Fuck
Speaker:it. Because it doesn't matter. Make music because you love making music
Speaker:and you'll build your career in music regardless of how many pennies Spotify is
Speaker:or isn't giving you. It doesn't matter what metric the world thinks should define
Speaker:you. You define yourself and you decide what success is to.
