Spotify's Controversial Move: Paying Less to Less-Popular Artists

Spotify is reportedly planning to pay even less in royalties to artists who don't already have a large number of streams. The streaming service is restructuring its royalty system and will de-monetize tracks that previously received 0.5% of Spotify's royalty pool. The new system will benefit more established artists and labels, as tracks will need to reach a minimum number of annual streams before generating royalties. Spotify also plans to penalize distributors and labels for "fraud" in uploaded tracks and impose minimum play-time requirements for non-music tracks. While major labels are likely to sign on, this change may discourage smaller labels and independent artists from keeping their music on Spotify, potentially widening the income gap between big stars and smaller acts.