Don’t Let Congress Reward the Stations That Don’t Pay Artists (Editor Charlie/Artist Rights Watch)
White House drafts order directing Justice Department to sue states that pass AI regulations (Gerrit De Vynck and Nitasha Tiku/Washington Post)
DOJ Authority and the “Because China” Trump AI Executive Order (Chris Castle/MusicTech.Solutions)
WHAT $1.5 BILLION GETS YOU: AN OBJECTOR’S GUIDE TO THE BARTZ SETTLEMENT (Chris Castle/MusicTechPolicy)
StubHub’s First Earnings Faceplant: Why the Ticket Reseller Probably Should Have Stayed Private (Chris Castle/ArtistRightsWatch)
The UK Finally Moves to Ban Above-Face-Value Ticket Resale (Chris Castle/MusicTech.Solutions)
Ashley King: Oasis Praises Victoria’s Strict Anti-Scalping Laws While on Tour in Oz — “We Can Stop Large-Scale Scalping In Its Tracks” (Artist Rights Watch/Digital Music News)
GUEST POST: SHOW US THE TERMS: IMPLICATIONS OF THE SPOTIFY/NMPA DIRECT AUDIOVISUAL LICENSE FOR INDEPENDENT SONGWRITERS (Gwen Seale/MusicTechPolicy)
WHAT WE KNOW—AND DON’T KNOW—ABOUT SPOTIFY AND NMPA’S “OPT-IN” AUDIOVISUAL DEAL (Chris Castle/MusicTechPolicy)
When Spotify and the National Music Publishers’ Association (NMPA) announced an “opt-in” audiovisual licensing portal this month, the headlines made it sound like a breakthrough for independent songwriters. In reality, what we have is a bare-bones description of a direct-license program whose key financial and legal terms remain hidden from view.
Here’s what we do know. The portal (likely an HFA extravaganza) opened on November 11, 2025 and will accept opt-ins through December 19. Participation is limited to NMPA member publishers, and the license covers U.S. audiovisual uses—that is, music videos and other visual elements Spotify is beginning to integrate into its platform. It smacks of the side deal on pending and unmatched tied to frozen mechanicals that the CRB rejected in Phonorecords IV.
Indeed, one explanation for the gun decked opt-in period is in The Desk:
Spotify is preparing to launch music videos in the United States, expanding a feature that has been in beta in nearly 100 international markets since January, the company quietly confirmed this week.
The new feature, rolling out to Spotify subscribers in the next few weeks, will allow streaming audio fans to watch official music videos directly within the Spotify app, setting the streaming platform in more direct competition with YouTube.
The company calls it a way for indies to share in “higher royalties,” but no rates, formulas, or minimum guarantees have been disclosed so it’s hard to know “higher” compared to what? Yes, it’s true that if you evan made another 1¢ that would be “higher”—and in streaming-speak, 1¢ is big progress, but remember that it’s still a positive number to the right of the decimal place preceded by a zero.
The deal sits alongside Spotify’s major-publisher audiovisual agreements, which are widely believed to include large advances and broader protections—none of which apply here. There’s also an open question of whether the majors granted public performance rights as an end run around PROs, which I fully expect. There’s no MFN clause, no public schedule, and no audit details. I would be surprised if Spotify agreed to be audited by an independent publisher and even more surprised if the announced publishers with direct deals did not have an audit right. So there’s one way we can be pretty confident this is not anything like MFN terms aside from the scrupulous avoidance of mentioning the dirty word: MONEY.
But it would be a good guess that Spotify is interested in this arrangement because it fills out some of the most likely plaintiffs to protect them when they launch their product with unlicensed songs or user generated videos and no Content ID clone (which is kind of Schrödinger’s UGC—not expressly included in the deal but not expressly excluded either, and would be competitive with TikTok or Spotify nemesis YouTube).
But here’s what else we don’t know: how much these rights are worth, how royalties will be calculated, whether they include public performances to block PRO licensing of Spotify A/V (and which could trigger MFN problems with YouTube or other UGC services) and whether the December 19 date marks the end of onboarding—or the eve of a US product launch. And perhaps most importantly, how is it that NMPA is involved, the NMPA which has trashed Spotify far and wide over finally taking advantage of the bundling rates negotiated in the CRB (indeed in some version since 2009). Shocked, shocked that there’s bundling going on.
It’s one thing to talk about audiovisual covering “official” music videos and expressly stating that the same license will not be used to cover UGC no way, no how. Given Spotify’s repeated hints that full-length music videos are coming to the U.S. and the test marketing reported by The Desk and disclosed by Spotify itself, the absolute silence of the public statements about royalty rates and UGC, as well as the rush to get publishers to opt in before year-end all suggest that rollout is imminent. Until Spotify and the NMPA release the actual deal terms, though, we’re all flying blind—sheep being herded toward an agreement cliff we can’t fully see.
[A version of this post first appeared on MusicTechPolicy]
Spotify’s insistence that it’s “misleading” to compare services based on a derived per-stream rate reveals exactly how out of touch the company has become with the very artists whose labor fuels its stock price. Artists experience streaming one play at a time, not as an abstract revenue pool or a complex pro-rata formula. Each stream represents a listener’s decision, a moment of engagement, and a microtransaction of trust. Dismissing the per-stream metric as irrelevant is a rhetorical dodge that shields Spotify from accountability for its own value proposition. (The same applies to all streamers, but Spotify is the only one that denies the reality of the per-stream rate.)
Spotify further claims that users don’t pay per stream but for access as if that negates the artist’s per stream rate payments. It is fallacious to claim that because Spotify users pay a subscription fee for “access,” there is no connection between that payment and any one artist they stream. This argument treats music like a public utility rather than a marketplace of individual works. In reality, users subscribe because of the artists and songs they want to hear; the value of “access” is wholly derived from those choices and the fans that artists drive to the platform. Each stream represents a conscious act of consumption and engagement that justifies compensation.
Economically, the subscription fee is not paid into a vacuum — it forms a revenue pool that Spotify divides among rights holders according to streams. Thus, the distribution of user payments is directly tied to which artists are streamed, even if the payment mechanism is indirect. To say otherwise erases the causal relationship between fan behavior and artist earnings.
The “access” framing serves only to obscure accountability. It allows Spotify to argue that artists are incidental to its product when, in truth, they are the product. Without individual songs, there is nothing to access. The subscription model may bundle listening into a single fee, but it does not sever the fundamental link between listener choice and the artist’s right to be paid fairly for that choice.
In fact, this “access” argument may undermine Spotify’s point entirely. If subscribers pay for access, not individual plays, then there’s an even greater obligation to ensure that subscription revenue is distributed fairly across the artists who generate the listening engagement that keeps fans paying each month. The opacity of this system—where listeners have no idea how their money is allocated—protects Spotify, not artists. If fans understood how little of their monthly fee reached the musicians they actually listen to, they might demand a user-centric payout model or direct licensing alternatives. Or they might be more inclined to use a site like Bandcamp. And Spotify really doesn’t want that.
And to anticipate Spotify’s typical deflection—that low payments are the label’s fault—that’s not correct either. Spotify sets the revenue pool, defines the accounting model, and negotiates the rates. Labels may divide the scraps, but it’s Spotify that decides how small the pie is in the first place either through its distribution deals or exercising pricing power.
Daniel Ek, the Spotify CEO and arms dealer, made a Dickensian statement that tells you everything you need to know about how Spotify perceives their role as the Streaming Scrooge—“Today, with the cost of creating content being close to zero, people can share an incredible amount of content”.
That statement perfectly illustrates how detached he has become from the lived reality of the people who actually make the music that powers his platform’s market capitalization (which allows him to invest in autonomous weapons). First, music is not generic “content.” It is art, labor, and identity. Reducing it to “content” flattens the creative act into background noise for an algorithmic feed. That’s not rhetoric; it’s a statement of his values. Of course in his defense, “near zero cost” to a billionaire like Ek is not the same as “near zero cost” to any artist. This disharmonious statement shows that Daniel Ek mistakes the harmony of the people for the noise of the marketplace—arming algorithms instead of artists.
Second, the notion that the cost of creating recordings is “close to zero” is absurd. Real artists pay for instruments, studios, producers, engineers, session musicians, mixing, mastering, artwork, promotion, and often the cost of simply surviving long enough to make the next record or write the next song. Even the so-called “bedroom producer” incurs real expenses—gear, software, electricity, distribution, and years of unpaid labor learning the craft. None of that is zero. As I said in the UK Parliament’s Inquiry into the Economics of Streaming, when the day comes that a soloist aspires to having their music included on a Spotify “sleep” playlist, there’s something really wrong here.
Ek’s comment reveals the Silicon Valley mindset that art is a frictionless input for data platforms, not an enterprise of human skill, sacrifice, and emotion. When the CEO of the world’s dominant streaming company trivializes the cost of creation, he’s not describing an economy—he’s erasing one.
While Spotify tries to distract from the “per-stream rate,” it conveniently ignores the reality that whatever it pays “the music industry” or “rights holders” for all the artists signed to one label still must be broken down into actual payments to the individual artists and songwriters who created the work. Labels divide their share among recording artists; publishers do the same for composers and lyricists. If Spotify refuses to engage on per-stream value, what it’s really saying is that it doesn’t want to address the people behind the music—the very creators whose livelihoods depend on those streams. In pretending the per-stream question doesn’t matter, Spotify admits the artist doesn’t matter either.
The collapse of artist revenue and the rise of AI aren’t coincidences; they’re two gears in the same machine. Streaming’s economics rewards infinite supply at near-zero unit cost which is really the nugget of truth in Daniel Ek’s statements. This is evidenced by Spotify’s dalliances with Epidemic Sound and the like. But—human-created music is finite and costly; AI music is effectively infinite and cheap. For a platform whose margins improve as payout obligations shrink, the logical endgame is obvious: keep the streams, remove the artists.
Where does that leave us? Both streaming and AI “work” best for Big Tech, financially, when the artist is cheap enough to ignore or easy enough to replace. AI doesn’t disrupt that model; it completes it. It also gives cover through a tortured misreading through the “national security” lens so natural for a Lord of War investor like Mr. Ek who will no doubt give fellow Swede and one of the great Lords of War, Alfred Nobel, a run for his money. (Perhaps Mr. Ek will reimagine the Peace Prize.) If we don’t hard-wire licensing, provenance, and payout floors, the platform’s optimal future is music without musicians.
Plato conceived justice as each part performing its proper function in harmony with the whole—a balance of reason, spirit, and appetite within the individual and of classes within the city. Applied to AI synthetic works like those generated by Sora 2, injustice arises when this order collapses: when technology imitates creation without acknowledging the creators whose intellect and labor made it possible. Such systems allow the “appetitive” side—profit and scale—to dominate reason and virtue. In Plato’s terms, an AI trained on human art yet denying its debt to artists enacts the very disorder that defines injustice.
[This post first appeared on ArtistRights Watch]
Something to think about during the Spotify earnings call.
Over the summer, a growing group of artists began pulling their catalogs from Spotify—not over miserable and Dickensian-level royalties alone, but over Spotify CEO Daniel Ek’s vast investment in Helsing, a European weapons company. Helsing builds AI-enabled offensive weapons systems that skirt international human rights law, specifically Article 36 of the Geneva Conventions. Deerhoof helped kick off the current wave; other artists (including Xiu Xiu, King Gizzard & the Lizard Wizard, Hotline TNT, The Mynabirds, WU LYF, Kadhja Bonet, and Young Widows) have followed or announced plans to do so.
Helsing is a Munich-based defense-tech firm founded in 2021. It began with AI software for perception, decision-support, and electronic warfare, and has expanded into hardware. The company markets the HX‑2 “AI strike drone,” described as a software‑defined loitering munition intended to engage artillery and armored targets at significant range—and kill people. It emphasizes resilience to electronic warfare, swarm/networked tactics via its Altra recon‑strike platform, and a human in/on the loop for critical decisions, and that limited role for humans in killing other humans is where it runs into Geneva Convention issues. Trust me, they know this.
Beyond drones, Helsing provides AI electronic‑warfare upgrades for Germany’s Eurofighter EK (with Saab), and has been contracted to supply AI software for Europe’s Future Combat Air System (FCAS). Public briefings and reporting indicate an active role supporting Ukraine since 2022, and a growing UK footprint linked to defense modernization initiatives. In 2025, Ek’s investment firm led a major funding round that valued Helsing in the multibillion‑euro range alongside contracts in the UK, Germany, and Sweden.
So let’s be clear—Helsing is not making some super tourniquet or AI medical device that has a dual use in civilian and military applications. This is Masters of War stuff. Which, for Mr. Ek’s benefit, is a song.
For these artists, the issue isn’t abstract: they see a direct line between Spotify‑generated wealth and AI‑enabled lethality, especially as Helsing moves from software into weaponized autonomy at scale. That ethical conflict is why exit statements explicitly connect Dickensian streaming economics and streamshare thresholds to military investment choices. In fact, it remains to be seen whether Spotify itself is using its AI products and the tech and data behind them for Helsing’s weapons applications.
There’s no official tally. Reporting describes a wave of departures and names specific acts. The list continues to evolve as more artists reassess their positions.
For Spotify, a handful of indie exits barely moves the needle. The reason is the pro‑rata or “streamshare” payout model: each rightsholder’s share is proportional to total streams, not a fixed per‑stream rate except if you’re “lucky” enough to get a “greater of” formula. Remove a small catalog and its share simply reallocates to others. For artists, leaving can be meaningful—some replace streams with direct sales (Bandcamp, vinyl, fan campaigns) and often report higher revenue per fan. But at platform scale, the macro‑economics barely budge.
Of course because of Spotify’s tying relationships with talent buyers for venues (explicit or implicit) not being on Spotify can be the kiss of death for a new artist competing for a Wednesday night at a local venue when the venue checks your Spotify stats.
Two practices make artist exits feel symbolically loud but structurally quiet—and they’re exactly what frontier AI should avoid:
1) Revenue‑share pools with opaque rules. Pro‑rata “streamshare” pushes smaller players toward zero; any exit just enriches whoever remains. AI platforms contemplating rev‑share training or retrieval deals should learn from this: user‑centric or usage‑metered deals with transparent accounting are more legible than giant, shifting pools.
2) NDA‑sealed terms. The streaming era normalized NDAs that bury rates and conditions. If AI deals copy that playbook—confidential blacklists, secret style‑prompt fees, unpublished audit rights—contributors will see protest as the only lever. Transparency beats backlash.
3) Weapons Related Use Cases for AI. We all know that the frontier labs like Google, Amazon, Microsoft and others are all also competing like trained seals for contracts from the Department of War. They use the same technology trained on culture ripped off from artists to kill people for money.
• HX‑2 AI Strike Drone: beyond‑line‑of‑sight strike profile, on‑board target re‑identification, EW‑resilient, swarm‑capable via Altra; multiple payload options; human in/on the loop.
• Eurofighter EK (Germany): with Saab, AI‑enabled electronic‑warfare upgrade for Luftwaffe Eurofighters oriented to SEAD/DEAD roles.
• FCAS AI Backbone (Europe): software/AI layer for the next‑generation air combat system under European procurement.
• UK footprint: framework contracting in the UK defense ecosystem, tied to strike/targeting modernization efforts.
• Ukraine: public reporting indicates delivery of strike drones; company statements reference activity supporting Ukraine since 2022.
Whether you applaud or oppose war tech, the ethical through‑line in these protests is consistent: creators don’t want their work—or the wealth it generates—financing AI (especially autonomous) weaponry. Because the platform’s pro‑rata economics make individual exits financially quiet, the conflict migrates into public signaling and brand pressure.
• Opt‑in, auditable deals for creative inputs to AI models (training and RAG) with clear unit economics and published baseline terms.
• User‑centric or usage‑metered payouts (by contributor, by model, by retrieval) instead of a single, shifting revenue pool.
• Public registries and audit logs so participants can verify where money comes from and where it goes.
• No gag clauses on baseline rates or audit rights.
The strike against Spotify is about values as much as value. Ek’s bet on Helsing—drones, electronic warfare, autonomous weapons—makes those values impossible for some artists to ignore. Thanks to the pro‑rata royalty machine, the exits won’t dent Spotify’s bottom line—but they should warn AI platforms against repeating the same opaque rev‑shares and NDAs that leave creators feeling voiceless in streaming.
Spotify has quietly tightened the screws on AI this summer—while simultaneously clarifying how it uses your data to power its own machine‑learning features. For artists, rightsholders, developers, and policy folks, the combination matters: Spotify is making it harder for outsiders to train models on Spotify data, even as it codifies its own first‑party uses like AI DJ and personalized playlists.
Spotify is drawing a bright line: no training models on Spotify; yes to Spotify training its own. If you’re an artist or developer, that means stronger contractual leverage against third‑party scrapers—but also a need to sharpen your own data‑governance and licensing posture. Expect other platforms in music and podcasting to follow suit—and for regulators to ask tougher questions about how platform ML features are audited, licensed, and accounted for.
Below is a plain‑English (hopefully) breakdown of what changed, what’s new or newly explicit, and the practical implications for different stakeholders.
Spotify’s User Guidelines now flatly prohibit “crawling” or “scraping” the service and, crucially, “using any part of the Services or Content to train a machine learning or AI model.” That’s a categorical no for bots and bulk data slurps. The Developer Policy mirrors this: apps using the Web API may not “use the Spotify Platform or any Spotify Content to train a machine learning or AI model.” In short: if your product ingests Spotify data, you’re in violation of the rules and risk enforcement and access revocation.
The Privacy Policy (effective August 27, 2025) spells out that Spotify uses personal data to “develop and train” algorithmic and machine‑learning models to improve recommendations, build AI features (like AI DJ and AI playlists), and enforce rules. That legal basis is framed largely as Spotify’s “legitimate interests.” Translation: your usage, voice, and other data can feed Spotify’s own models.
If you post “User Content” (messages, playlist titles, descriptions, images, comments, etc.), you grant Spotify a worldwide, sublicensable, transferable, royalty‑free, irrevocable license to reproduce, modify, create derivative works from, distribute, perform, and display that content in any medium. That’s standard platform drafting these days, but the scope—including derivative works—has AI‑era consequences for anything you upload to or create within Spotify’s ecosystem (e.g., playlist titles, cover images, comments).
The User Guidelines and Developer Policy double down on bans against bots, artificial streaming, and traffic manipulation. If you’re building tools that touch the Spotify graph, treat “no automated collection, no metric‑gaming, no derived profiling” as table stakes—or risk enforcement, up to termination of access.
Spotify says it can provide pseudonymized listening data to rightsholders under existing deals. That’s not new, but in the ML context it underscores why parallel data flows to third parties are tightly controlled: Spotify wants to be the gateway for data, not the faucet you can plumb yourself.
• Artists & labels: The AI‑training ban gives you a clear contractual hook against services that scrape Spotify to build recommenders, clones, or vocal/style models. Document violations (timestamps, IPs, payloads) and send notices citing the User Guidelines and Developer Policy. Meanwhile, assume your own usage and voice interactions can be used to improve Spotify’s models—something to consider for privacy reviews and internal policies.
• Publishers and collecting societies: The combination of “no third‑party training” + “first‑party ML training” is a policy trend to watch across platforms. It raises familiar questions about derivative data, model outputs, and whether platform machine learning features create new accounting categories—or require new audit rights—in future licenses.
• Policymakers: Read this as another brick in the “closed data/open model risk” wall. Platforms restrict external extraction while expanding internal model claims. That asymmetry will shape future debates over data‑access mandates, competition remedies, and model‑audit rights—especially where platform ML features may substitute for third‑party discovery tools.
Practical to‑dos
1) For rights owners: Add explicit “no platform‑sourced training” language in your vendor, distributor, or analytics contracts. Track and log known scrapers and third‑party tools that might be training off Spotify. Consider notice letters that cite the specific clauses.
2) For privacy and legal teams: Update DPIAs and data maps. Spotify’s Privacy Policy identifies “User Data,” “Usage Data,” “Voice Data,” “Message Data,” and more as inputs for ML features under legitimate interest. If you rely on Spotify data for compliance reports, make sure you’re only using permitted, properly aggregated outputs—not raw exports.
3) For users: I will be posting a guideline to how to clawback your data. I may not hit everything so always open to suggestions about whatever else that others spot.
Spotify’s terms give it very broad rights to collect, combine, and use your data (listening history, device/ads data, voice features, third-party signals) for personalization, ads, and product R&D. They also take a broad license to user content you upload (e.g., playlist art).
Key cites
• User Guidelines: prohibition on scraping and on “using any part of the Services or Content to train a machine learning or AI model.”
• Developer Policy (effective May 15, 2025): “Do not use the Spotify Platform or any Spotify Content to train a machine learning or AI model…” Also bans analyzing Spotify content to create new/derived listenership metrics or user profiles for ad targeting.
• Privacy Policy (effective Aug. 27, 2025): Spotify uses personal data to “develop and train” ML models for recommendations, AI DJ/AI playlists, and rule‑enforcement, primarily under “legitimate interests.”
• Terms & Conditions of Use: very broad license to Spotify for any “User Content” you post, including the right to “create derivative works” and to use content by any means and media worldwide, irrevocably.
[A version of this post first appeared on MusicTechPolicy]
If you care about music, creative freedom, and getting paid for your work, this one is for you.
by Chris Castle
Spotify recently rolled out a quiet but seismic change to its royalty system: if a track doesn’t get at least 1,000 streams in a 12-month period, it earns no royalties. Zero. The company claims this policy is about reducing “fraud” and redirecting money to “working artists,” but behind that PR gloss is a shift that disproportionately harms independent musicians and smaller rightsholders.
Let’s be clear—this isn’t just about removing noise from the system. It’s about redrawing the map of who gets paid in the streaming economy and who gets pushed out.
At first glance, 1,000 streams might sound like a modest hurdle. But in the aggregate, this threshold excludes potentially millions of tracks from ever receiving a dime—even though Spotify continues to profit from their presence through ad revenue and user engagement. It’s easy to assume the affected tracks belong only to DIY artists or obscure creators. But that’s not necessarily true.
Spotify’s royalty model is track-focused, not artist-focused. You could have a single that racks up a million streams while the rest of the album struggles to clear a few hundred. Those lower-performing tracks—despite being part of a cohesive release—won’t earn a cent. Left to its own devices, the platform favors individual track performance over albums or an artist’s entire catalog. And that has sweeping implications not only for how artists are paid, but for how music is created, released, and valued in the streaming age.
The most revealing part of this policy isn’t what it claims to fix, but what it quietly avoids. Spotify is likely under enormous pressure—from major labels and rights holders—to raise the artist payouts. No matter how much Spotify denies the per-stream rate, there will always be a per-stream rate even if they pay a “stream share” to a label for the very simple reason that the label has to convert that revenue share into a per stream rate in order to allocate it to their several artists. That’s as simple as gross vs. net.
Plus we know just how bad the gross is from indie artists who get paid 100% of the “stream share”. It’s shit, ok? That’s why we know Spotify are under pressure to increase royalties.
But arbitrarily raising the total royalty pool would have consequences: it could trigger most-favored-nation clauses, obligate Spotify to pay more across the board.
Another way to raise royalties would be to “flatten” some of the minimum guarantee, i.e., make a portion of it nonrecoupable from future royalty payments. This was the practice with record clubs—a nonrecoupable payment has the added benefit of not being shared with artists as a kind of catalog-wide payment. This would also likely trigger MFNs, so that’s not super appealing either.
So by excluding low-performing tracks from the royalty pool, Spotify isn’t reducing fraud or increasing fairness. It’s reallocating revenue. And not randomly—it’s redistributing it upward. The money those artists would have earned is now being handed to the top-performing tracks, which overwhelmingly belong to major labels and large catalog owners.
Don’t you think that if the goal was to reduce costs, Spotify would just shrink the pie and pocket the difference? It seems to me that more money to fewer people is likely the real purpose of the 1,000-stream rule.
Spotify isn’t alone. Amazon Music and Deezer have introduced similar thresholds, raising serious concerns about whether this is a coordinated move by dominant platforms to marginalize smaller rightsholders. When multiple major services adopt the same gatekeeping metric at the same time, and benefit in the same way, it’s not unreasonable to ask whether they’re acting in lockstep. In fact, this concept in antitrust law is called tacit collusion (or “conscious parallelism”) which occurs when competitors coordinate their behavior—such as pricing or output—without explicit agreements or communication. Instead of entering into a formal cartel, companies mirror each other’s pricing or business strategies, knowing that mutual restraint benefits all of them
Even if there’s no smoking gun, the outcome is clear: fewer royalties paid to emerging and independent creators, and more concentrated control over who makes money from streaming.
Here’s the twist: just because a track falls below 1,000 streams and no longer qualifies for royalties doesn’t mean Spotify stops using it. These sub-threshold tracks don’t vanish—they become part of what we might call Spotify’s “shadow catalog”: music that still populates playlists, fuels the recommendation algorithm, and keeps users listening, but doesn’t generate payouts.
Every time a user plays a low-performing track, Spotify collects engagement data. That information feeds into its personalization systems, sharpening the algorithm’s ability to retain users and increase time-on-platform. That extra engagement helps Spotify serve more ads, train better models, and keep listener churn down. It also enriches Spotify’s advertising and data ecosystem, especially on the free tier where listening time directly translates to ad revenue.
In other words, these unpaid tracks are still part of the machine. Spotify uses them to optimize engagement and advertising—but without paying the creators a cent. It’s profit without payout. Value extraction without compensation. And in the long tail of the music economy, that adds up to millions of tracks silently pulling their weight for free.
So it seems that this is the quid for the pro quo.
The 1,000-stream threshold is a cautionary tale for songwriters as they approach Phonorecords V. What began as a “fraud prevention” tool is now a benchmark for excluding smaller rights holders from royalties altogether. Streaming services will point to these thresholds as precedent—arguing that if labels can accept payout limits, publishers should too. Without strong opposition, platforms could push for mechanical royalty thresholds that mirror streamshare rules, cutting off compensation to low-earning songs. This isn’t just about recorded music anymore. It’s a warning: once a gate is built, it can be copied—and used to lock out songwriters next.
Spotify’s royalty threshold is spun as a way to fight fraud and reward “working artists,” you know, kind of like don’t be evil. But in reality, it codifies a system where only the most popular tracks get paid—regardless of how much they contribute to the overall value of the platform.
And when other streaming services follow the same path, it stops looking like business as usual and starts to resemble a coordinated effort to narrow the market and marginalize everyone but the top-tier players.
This isn’t a royalty system built on fairness or transparency. It’s a redistribution scheme—not to help more artists earn a living, but to serve bigger slices to fewer people.
And that should raise alarms far beyond the music industry. Looking at you, Gail Slater.
Spotify has long claimed its algorithms can spot breakout tracks and rising artists long before traditional gatekeepers notice. From Discover Weekly to Release Radar, the service positions itself as more than a music service — it’s an engine for musical discovery. You know…exposure.
In interviews, press releases, and annual shareholder letters, Daniel Ek the former pirate and future defense contractor and Spotify have boasted that their data can pinpoint the ‘next big thing,’ making Spotify the best place for discovering and nurturing new talent. They raise money on the issue and their market cap is $150.983B today. So they’re sharing the gold with the artists that they extract value from, yes?
Well, no. Spotify now imposes a threshold: tracks must reach roughly 1,000 streams per year to qualify for recorded music royalties. But understand this–while they don’t pay on those 1,000 streams, they do collect listener data on them and that powers their algorithm. You know, the algorithm they brag on can spot talent, kid. Because those first 1,000 streams are whatchamacallit…free goods. Or is it breakage? Or maybe a kind of packaging deduction?
Under this no-pay-but-track model, Spotify can recognize early listener activity and harness it for its personalized playlists and marketing efforts — yet it doesn’t pay artists for those early plays until the artist meets an arbitrary 1,000 stream threshold. And realize this–an artist could have 100 tracks with 1 million streams each and 100 tracks with less than 1,000, and they won’t get paid on the less streamed tracks. So the pitch here is the track not the artist, yet another contradiction from the Spotify pitch deck.
This creates a troubling tension:
For Spotify: The first few hundred plays are enough for its algorithm to assess the track, recommend it to listeners, and monetize engagement. And brag on it to investors.
For Artists: Those same early plays don’t count toward royalties. The track can gain exposure across the platform, but the artist sees no income until the threshold is crossed.
Aside from they’re scumbags? Well, if Spotify can spot a breakout track when it has only a few hundred plays, why can’t it pay for those plays? Its data and recommendations benefit Spotify — obviously, they brag on it. The free goods data makes the service more attractive, bolstering its story to investors, and enriching its user experience — long before it benefits the artist making the records. (To add insult to injury, they do have to pay the songwriters under the benighted compulsory license which they no doubt are going to try to ditch in the next CRB.)
This paradox exposes a deeper tension in the streaming model: platforms excel at extracting value from listener data but adopt a policy to let them grab that data long before it translates into royalties for creators. Talk about data is the new oil.
This paradox shines a light on how platforms monetize listener data early — and benefit from it — while delaying or denying payments for those same streams. What Spotify promotes as ‘discovery’ often operates as monetization for the platform, leaving the artist with nothing until an arbitrary threshold is crossed. The same is likely true of all the platforms that adopt Spotify’s freebie threshold model in what the antitrust lawyers call conscious parallelism, looking at you Amazon and Deezer.
If Spotify truly champions discovery, it should champion fair compensation from the first stream. The ability to spot breakout tracks early must be matched by a commitment to pay for them.
It’s time for a more transparent and equitable approach — one that recognizes the value of every stream and every listener, regardless of its place in the self licking ice cream cone.
This post first appeared on MusicTech.Solutions
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