The facade of fairness in streaming and social media is crumbling. Platforms that once promised democratized access and exposure now increasingly operate as extractive ecosystems, where smaller creators are treated less like valued contributors and more like disposable engagement fuel. As George Howard put it in his recent article, creators are “standing reserve” or becoming inventory for these larger platforms.

Nowhere is this clearer than Spotify’s recent policy changes, which blatantly deprioritize independent artists in favor of mass consumption and profit concentration. The mask is off: these platforms were never designed to support sustainable creative careers—they were built to profit from them.

Spotify’s 1,000 Streams Rule

In April 2024, Spotify instituted a new rule ceasing royalty pay outs to artists on tracks that generated under 1,000 streams over the previous 12 months. The money that would have been paid out for those tracks is instead distributed pro rata to tracks with over 1,000 streams. We’ve now just passed the one year mark since that change was put in place. 

According to a report from Luminate (Nielsen Soundscan) and analysis from Discmakers CEO Tony van Veen, 175.5 million tracks —86.8% of all tracks on Spotify —  generated less than 1000 streams and thus the creators of these tracks received no royalty payments from the streaming platform. That’s approximately $47 million in royalties redistributed to the top 13% of artists and labels on Spotify.

This data — and it’s worth a deep dive into the linked article above — underscores what everyone in music has known for a long time:music streaming supports the major labels, but not independent artists.

What is Spotify saying with this payout change?

Taken from a single artist perspective, because the payouts from Spotify are so low, the amount of money an individual artist loses from Spotify’s rule change is small. A song that generated under 1000 streams in a year would earn at most $3.29. However, that is a fault in the streaming system, and not a fault of the artist.

For a 3-minute song, 999 streams represents nearly 50 hours of listening time by fans. The fans are deriving value from this, and by Spotify not paying out on even the meager $0.0033 royalty per stream, they are adding insult to injury for smaller artists. 

Essentially they are saying to artists: “Your fans pay us a subscription in order to enjoy dozens of hours of listening time of your music on our platform, but because we pay you so little money, it’s not worth the time (and accounting costs) to pay you, the artists, anything at all.” 

It’s maddening! And it makes it clear that for most artists Spotify and the other streaming platforms represent at best a top-of-funnel marketing tool; a place for artists to publish their most polished recordings in the vague hope that their work might reach new ears.

What does this change for artists?

Honestly, aside from the mask of benevolence being removed from Spotify, not much. Payout change or not, streaming services pay artists very little. At the very least, this should be a reminder that sustainable artist careers are built from fan relationships.

Rae Isla recently wrote this piece on the Harmonic blog, which details how she builds relationships with her fans.

Despite knowing that streaming pays out very little (if at all), I still see artists focusing their new release marketing efforts on streaming. As a result, artists are promoting the very same platforms that refuse to pay them and are failing to build deeper connections with their fans. 

I’ve been trying to wrap my head around why this may be. Do these artists only listen to music on streaming platforms, therefore they only think to promote their releases there? Does it make artists uncomfortable to “sell” something as opposed to highlighting content on a platform fans are already paying for? Are we just beaten down and accepting the status quo?

This is not to say that artists shouldn’t distribute their music to streaming platforms and shouldn’t announce that it’s available. But surely that should be secondary to telling the story of the new release and encouraging fans to purchase their music in some capacity; be it physical media, associated merch, or a download.

In no other form of entertainment do creators so willingly give up their content to platforms (and  thus consumers) without payment. At least when a new movie debuts on Netflix, Netflix has already paid for the production or licensing of the film.

Try this, instead

The bar for financial returns from music releases is so low. A $50 merch sale is roughly equivalent to 15,000 streams (a number that many artists would be excited by!). But on the bright side, that makes it very easy to raise your bar regardless of where you are in your artist journey.

1. Musical byproducts: You’ve got more than just your final recordings on your hard drive. Demos, voice notes, live performance recordings. These hold incredible sentimental value for fans. Bundle those recordings with the official release and make it available to fans as a premium digital download.
2. Personal touch: I just discovered the artist Wheelwright from Phoenix. He’s burning CDs himself, stamping them, and signing them. I haven’t seen anyone put a CD into a CD player in ages, but people at his show were lining up for them (admittedly, I bought a t-shirt). Because he put a personal touch to his merch, people wanted it far more than if it was a professionally printed product.
3. Print-on-demand: Merch is tough when you’re getting going. Knowing how many t-shirts to order is impossible, and you don’t want to drop thousands of dollars on product that will sit in boxes  in your garage. Platforms like Printful allow you to print products on demand and have an array of designs available. It’s not sexy, and the margins are lower than manufacturing in bulk. But if you make even $5 per t-shirt sale, that’s more money than you would make from 1,500 streams. 

Harmonic

At Harmonic, we’re trying to make all of this easier, more modern, and more community-driven. If an artist’s music has value even to just one fan, the artist should be compensated for that value. The value should not be accrued to the benefit of the platform.

To make this vision a reality, we’re building a marketplace where artists can list their music, merchandise, and more at prices that they set. And we’re helping activate fans as curators of great independent art, by giving fans the tools to promote and sell music of their favorite artists. 

If you’re an independent artist and want to help shape what a new music marketplace looks like, we’d love to have you join our private artist beta. Fill out the form here to join: https://www.harmonic.fm/#Form