Spotify’s new royalty system means so-called functional noises like the sound of rainfall will earn significantly less than traditional music files.
In an attempt to crack down on “bad actors” using the genre to fraudulently generate revenue, Spotify announced in a blog post Tuesday it would be increasing the minimum track length for functional noise recordings to two minutes, as well as valuing streams of the sounds at a “fraction of the value” of music track streams.
A sound featuring 30 seconds of white noise has thus far been worth the same as an artist’s original music track, creating a “revenue opportunity for noise uploaders well beyond their contribution to listeners,” according to Spotify, and creating frustration throughout the music industry.
Until now, creators of functional sounds have been able to game Spotify’s streaming system to maximize revenue with minimal effort. Since streaming royalties are paid out partly based on the amount of times a track is played and sounds like white noise are often listened to for hours, Spotify says creators are shortening sounds to as little as 30 seconds (the platform’s current minimum track length) and looping playlists so that the same clip gets listened to over and over again, bumping up streaming numbers and royalty cash outs.
While Spotify did not state how much the platform would be devaluing the streams, Billboard reported that functional tracks would now be worth one-fifth of their music counterparts.
The functional genre includes nature sounds, white noise, sound effects and silence recordings.
“It can’t be that an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof,” Robert Kync, Warner Music Group CEO, said in a May earnings call, a sentiment echoed by other music executives.
“Obviously white noise is very different from ‘Bohemian Rhapsody,’ but it, currently under this model, is paid the same,” Marina Guz, chief commercial officer at Endel, an AI-driven functional music company partnered with Universal Music Group, told CNN.
Guz explained that there has been rising pressure from labels and artists to change the way Spotify makes distinctions between functional noise and music.
“There’s been an ongoing conversation this entire year of the value of music and how something like someone just putting up white noise is different than paying for an artist that had spent a year in the studio making the album with all kinds of instruments and people involved,” Guz told CNN.
In another attempt to clamp down on malicious behavior, the platform announced Tuesday it is moving to charge labels and distributors by track when “flagrant” artificial streaming is suspected. Artificial streaming is when streams counts are increased fraudulently, such as through bots. The company is also making changes to its royalty system, moving to only compensate tracks that generate more than 1000 streams.
Spotify has also come under scrutiny for white noise podcasts, with Bloomberg reporting in 2023 that podcasts featuring only ambient sounds were accounting for three million daily consumption hours and accidentally being boosted by Spotify’s own algorithm, resulting in a $38 million loss in potential annual profits. Creators of such podcasts could reportedly rake in as much as $18,000 a month in ads, Bloomberg found in 2022.
Spotify’s changes will roll out early next year.
Read the full article here
