Qualified monetisation and fraud penalties come into effect. As of April 2024, Spotify will launch the so-called “Qualified Monetisation Model” and the penalty fees for streaming fraud. “Qualified monetisation” means that, starting with the statements for April, Spotify will only pay for tracks that have reached at least 1,000 streams in the previous 12 months.
If this minimum quantity is not reached, the respective royalties of the track flow back into the revenue pot and are distributed pro rata to all the tracks that have reached at least 1,000 streams. This way, Spotify hopes to increase revenue for artists “who are most dependent on streaming income” – i.e. those who can already generate at least a somewhat relevant income via streaming.
The aim is also to combat so-called “long tail fraud” and AI-supported streaming manipulation, in which an extremely large number of tracks are released and then very few streams are generated via bot farms, resulting in very small payouts.
In addition, penalties will come into force from April for products where “flagrant artificial streaming is detected”. In this way, Spotify wants to proactively prevent fraudulent behaviour instead of only being able to react when it has already happened. Any fines incurred will be passed on to the account holders of the products that have been flagged. This ensures that such fines never affect clients who have not been found to be involved in streaming fraud.
We would like to remind you that such manipulations will also be sanctioned if they were not initiated directly by you, for example, a promotion agency or similar commissioned by you is responsible for the manipulation. So please carefully check in advance which partners you commission and whether they are trustworthy. You should definitely avoid providers who guarantee a certain amount of streams or playlist placements for a fee. You can find more information and tips here in this Spotify blog post. In addition to the penalties, Spotify will of course still annul irregular streams and these will not be remunerated.
