Independent labels ask Spotify to pause ‘blunt instrument’ royalty plan

A coalition of independent record labels has called on Spotify to answer questions about its revamped royalty structure and pause plans for early 2024 implementation.

EU-based trade group Impala, which represents more than 6000 companies and individuals involved in independent music, generally agrees with Spotify’s plan to limit the dilution of the royalty pool by white noise, nature sounds, and other functional content and to fine labels and distributors for fraudulent activity, “as long as there are checks and balances in place.”

“a blunt instrument that demonetizes repertoire”

But the independents are very concerned by Spotify’s stated plan to stop paying on tracks that get less than 1000 streams a year, calling it a “blunt instrument that demonetizes repertoire altogether to the benefit of more popular tracks.”

Before any change occurs, indies are asking for proof that the changes will not penalize smaller and less established labels and artists, deep catalog repertoire, smaller territories, specialist genres, and longer tracks.

“It is imperative for open and constructive discussions to continue to sculpt a streaming landscape that boosts diversity and local markets to the benefit of services, labels, artists, and music fans alike,” states Impala’s open letter to Spotify. “The news on Monday regarding Spotify’s redundancies underlines the need to get the formula right.”

A Better Way

The trade group has also presented a ten-point plan to reform music streaming, summarized in this infographic, to which Spotify has yet to respond.

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.