Spotify Found Another Way To Pay Less To Songwriters
Spotify isn’t exactly renown for the exorbitant royalties that it pays to artists and songwriters, but the giant Swedish streaming company is still finding new ways to cut down the meager shares that it pays to the people who actually make the music that people listen to on the platform. Last year, the company restructured its royalty system to de-monetize tracks that previously received 0.5% of its royalty pool, which meant that plenty of independent and lesser-known musicians won’t make the cutoff. Now, Spotify has a whole new scheme going.
Spotify recently raised the price of its premium monthly subscription one dollar, to $10.99. That raised price includes 15 extra hours of audiobooks, which are quickly becoming a focus for the company. Billboard reports that the higher prices don’t include a raise in royalty payments to songwriters. Instead, the company claims that its audiobook content allows it to pay a lower “bundle” rate to songwriters.
According to Billboard, that pricing change means that songwriters and publishers will now earn $150 million less per year from Spotify, even though the subscription will be more expensive. The royalty loss will grow even more if Spotify, which is still growing, increases its subscription rate again to $11.99, a change that the company is reportedly considering. Right now, the change only affects the US version of Spotify, but it seems unlikely to stay that way.
David Israelite, president and CEO of the National Music Publishers’ Association, tells Billboard, “It appears Spotify has returned to attacking the very songwriters who make its business possible. Spotify’s attempt to radically reduce songwriter payments by reclassifying their music service as an audiobook bundle is a cynical, and potentially unlawful, move that ends our period of relative peace. We will not stand for their perversion of the settlement we agreed upon in 2022.” You can read more about the change in royalty plans at Billboard.