Spotify has officially stopped monetizing all songs that receive less than 1,000 streams annually on its platform.

This policy, which was part of Spotify's plans disclosed a few months prior, was formally implemented on April 1. The rationale for this modification was explained in the amendments to Spotify's royalty model, citing the issue of negligible amounts not reaching creators due to minimal withdrawal policies and bank withdrawal fees.

Spotify approximated that the total value lost is around $40 million, a substantial figure. To circumvent this, the company introduced a system where artists must accumulate at least 1,000 streams on each track released in the past 12 months to earn recorded royalties.

In the same announcement, Spotify asserted that it would not generate any extra revenue under this model, stating:

"We also believe the policy will eliminate one strategy used to attempt to game the system or hide artificial streaming, as uploaders will no longer be able to generate pennies from an extremely high volume of tracks."

According to Spotify's data, there are approximately 100 million tracks on the platform. With the new model, only about 37.5 million will qualify for royalty generation. In defense of the model, Spotify stated that the songs that do not meet the threshold constitute less than 1% of streams on the platform.

The company mentioned that 99.5% of all streams "are of tracks that have above 1,000 streams" and asserted that the demonetization program will not result in "change to the size of the music royalty pool being paid out to rights holders."

Spotify presented this as a positive shift, stating that the model will "use the tens of millions of dollars annually to increase the payments to all eligible tracks, rather than spreading it out into $0.03 payments," instead of significantly impacting rights holders.