Spotify's upcoming changes to its subscription tiers will allow the streaming service to use a new royalty model that dramatically impacts payments to songwriters. in a new Billboard According to the report, music publications reporter Kristin Robinson estimates that songwriters will receive about $150 million less during the first 12 months of its implementation compared to the previous model.
As Bloomberg As reported last month, Spotify will increase prices by $1 per month for individual plans and $2 per month for shared plans. These price increases will help subsidize the cost of bundling 15 hours of audiobooks per month as part of paid plans.
However, instead of increasing royalty rates, Spotify will pay a so-called “bundle” fee to songwriters for premium subscriber streams to further offset the cost of book licensing. This allows the streamer to price music at about “52% of the total package, or about $5.70 per subscriber” for the current $10.99 plan that includes audiobooks.
According Billboard'According to their calculations, “songwriters and publishers will earn approximately $150 million less in U.S. mechanical royalties from premium, duo and family plans during the first 12 months this is in effect, compared to what they would have earned if these three subscriptions would never have existed. packaging.”
This estimate is based on projections taken from the Mechanical Licensing Collective's Spotify rate sheets for 2023 and takes into account last year's 1.1% average monthly growth in music services revenue. The new payment model will not affect the first two months of 2024.
Read the full report at Billboard for the full breakdown.
The change in royalty payments comes after Spotify announced in October 2023 that it would require artists to reach a minimum threshold of 1,000 streams before receiving compensation as part of an effort to combat “non-musical audio content.” fraudulent.
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