Spotify Takes Action: Reduces Royalties for Rain Sounds, White Noise and Other Non-Music Tracks
In a bid to address revenue manipulation concerns and ensure fair compensation within its streaming platform, Spotify has announced significant changes to its royalty system, particularly impacting non-music tracks such as rain sounds and white noise.
In a blog post on Tuesday, Spotify detailed the modifications that include an increase in the minimum track length for functional noise recordings to two minutes. Additionally, streams of these functional sounds will now be valued at a “fraction of the value” compared to traditional music tracks.
The move comes as Spotify aims to curb what it terms as “bad actors” exploiting the system by looping short sound clips, inflating streaming numbers, and consequently increasing royalty payouts. Previously, 30 seconds of white noise carried the same value as an original music track, creating what Spotify describes as an unfair “revenue opportunity for noise uploaders well beyond their contribution to listeners.”
While Spotify did not disclose the exact devaluation percentage, reports suggest that functional tracks will now be worth one-fifth of their music counterparts.
The functional genre, encompassing nature sounds, white noise, sound effects, and silence recordings, has faced criticism for receiving the same compensation as intricate musical compositions. Industry leaders, including Warner Music Group CEO Robert Kync, have expressed the need for a differentiation in value between artist-created music and functional noise streams.
Marina Guz, Chief Commercial Officer at Endel, an AI-driven functional music company partnered with Universal Music Group, emphasized ongoing conversations about the value of music. Guz highlighted the distinction between an artist spending extensive time and effort creating an album versus someone uploading simplistic white noise.
In a parallel move, Spotify has introduced measures to address artificial streaming. Labels and distributors suspected of engaging in “flagrant” artificial streaming will now be charged by track. The platform is also adjusting its royalty system to compensate tracks only when they generate more than 1000 streams.
Spotify has faced previous scrutiny for white noise podcasts, with concerns that they were inadvertently boosted by the platform’s algorithm, leading to potential revenue losses. The changes are set to roll out early next year, marking a significant shift in how Spotify values and compensates different forms of content on its platform.
