The historical remuneration system for streamingToday, the main music streaming platforms redistribute around 70% of their revenue, generated by subscriptions or advertising, to the rights holders (artists and composers) in proportion to the number of listens exceeding 30 seconds. This is the market-centric model. It consists of distributing all the revenue to the rights holders of the tracks, on the basis of their market share of all the tracks streamed over a defined period. A song that is twice as popular as another therefore earns twice as many royalties.The new SPOTIFY systemThe major change in Spotify's system for paying artists is the addition of a minimum annual listener threshold, meaning that any song that does not reach this threshold will no longer receive royalties.From the first half of 2024, Spotify will therefore be adding a "minimum annual listener threshold" in order to be paid by the platform. The threshold to qualify for remuneration has been set at a minimum of 1,000 streams over the first 12 months following the publication of a piece of music.Behind this measure, Spotify expects to demonetise 0.5% of the songs on the platform. This would represent around $40 million that will be distributed differently next year.Another notable change is the introduction of fraud penalties for distributors. If it is shown that the song is associated with fraud, the song will be withdrawn and the distributors/labels will have to pay a fee. The fine is currently set at €10, and will apply where the song has more than 90% of fraudulent streams. The Swedish platform insists that it has algorithms capable of detecting fraud. JPMorgan analysts estimate that they account for 10% of total listening. Spotify, for its part, claims that this represents less than 1% of streams.Finally, Spotify will be increasing its listening time requirements for "noise tracks" (ambient sounds) to prevent too much remuneration being allocated to them to the detriment of artists.The first criticisms of this new model, effective from 2024Spotify has announced that 37.5 million tracks have been listened to more than 1,000 times on Spotify. With a catalogue of 100 million tracks, this means that around 62.5 million tracks (or 62.5% of its music) have not reached the minimum threshold in terms of streams of all time, let alone annual streams.Amelia Fletcher, professor of competition policy at the University of East Anglia's Norwich Business School, recently shared her view: "If a precedent is set here, there is nothing to stop the 0.5% threshold from increasing over time". She went on to quote Universal Music Group as saying that the new model "will reward real artists with real fan bases for the engagement they generate on the platform"."But if Spotify really wanted to 'reward real artists with real fan bases for the engagement they generate on the platform', all it would have to do is adopt a user-centric payment system," she wrote. "In this system, each user's subscription revenue is divided proportionally between the tracks they themselves listen to. This system would provide a simple solution to this apparent objective. It would also reduce the opportunities for streaming fraud. The fact that this option has been repeatedly rejected suggests that this is not the real reason for the proposed change".Deezer's new systemAlready a fervent advocate of the artist-centric model (users are paid exclusively for the artists they have actually listened to), Deezer has been implementing four new points since October 2024:Double the remuneration of artists who obtain at least 1,000 monthly listens from at least 500 unique listeners.Double the remuneration for songs with which fans actively engage.Non-artistic sound content (white noise, wave sounds, etc.) will not be taken into account when calculating royalties.Finally, Deezer promises to introduce a stricter fraud detection system to identify and eliminate those who try to circumvent the system.After concluding this agreement with Universal Music at the beginning of September, the French platform convinced another major to adopt a new model: Warner Music, whose boss Robert Kyncl has long been calling for adjustments: "It's no longer possible for an Ed Sheeran song to earn as much as the sound of rain falling on a roof", he stressed in the spring. This so-called "artist centric" system aims to better remunerate artists by limiting abuse and fraud.To find out more about their new model and the criticisms raised, you can read this articleConclusionThe new models proposed by streaming platforms are tending to reduce fraud and abuse, while at the same time boosting remuneration for artists with a solid fanbase. Although streaming accounts for around 65% of global revenues from recorded music, the majority of artists do not derive 65% of their revenues from streaming. According to a recent study, nine out of ten artists earn less than €1,000 a year from Spotify. The system is imperfect, and we are delighted that Deezer and Spotify are tackling the problem, but there is still a long way to go before we reach a fair and truly remunerative solution.