November 21

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Spotify’s Changes, OpenAI Up In The Air, YouTube Battling Ad Blockers

AI, Spotify, YouTube

It's been an interesting few days for content creators. Spotify confirmed some controversial changes to its payout model, arguably the biggest AI company almost collapsed over night, and YouTube confirmed it's creating suboptimal viewing experiences for some users.

Let's look at how any of this matters for content creators.

Spotify's Most Controversial Change Is True

Spotify confirmed what was widely reported recently. In order to combat streaming fraud, the company is implementing some major new changes. The first is charging music distributors and labels when they've been found to distribute a track with "flagrant artificial streaming." This translates to a fine of about $10 per song for any track with more than 90 percent fake streams. 

It's an interesting move, since many distributors aren't in control of whether or not a user chooses to buy fake streams for their song. But there are plenty of "distributors" and "labels" that also exist solely to create songs that they farm with fake streams in order to make a profit. In addition to not being paid for fake streams, they'll have to pony up for the scheme. 

The second big change is making all "noise" tracks be at least two minutes long before they can generate royalties. This will curb abuse from people who upload an hour worth of white noise in 30-second increments in order to maximize streaming payouts. 

But the final, and most controversial change, is instituting a minimum stream threshold before a song earns money. If a track doesn't hit 1,000 streams in a 12-month period, any of those royalties it generates will go back into the greater royalty pool to be redistributed. 

Spotify says these changes will generate more than $1 billion for artists over the next five years. But it's also created a major firestorm among independent artists and organizations who say the changes unfairly target new artists and send the wrong message about their value and worth. Probably not coincidentally, Spotify is also rolling out updates to its ad platform, where artists can pay the company to advertise their music directly on platform. 

OpenAI Undergoes Major Turmoil 

OpenAI turned the content world on its head a few years ago when it started unveiling its generative AI products like Dall-e and ChatGPT. The company's board turned OpenAI on its head a few days ago when it announced they removed former CEO (and investor) Sam Altman from his position. Co-founder and president Greg Brockman resigned from the company as a result.

Then, the board suddenly seemed like they might reverse course on the decision — meeting with Altman to discuss the possibility. But they decided not to, and Altman accepted a position at Microsoft (a major backer of OpenAI) a few hours later. Meanwhile, hundreds of OpenAI employees (totaling 97 percent of the company's workforce) threatened to quit, essentially forcing the board to backtrack and re-hire Altman — before then ousting members of the board.

Right now there are really only rumors as to why the board fired Altman, though they did say he was not fully honest with them in his discussions. Other reports suggest the board was worried about Altman's desire to develop AI technology quickly and worry about the ethics (and dangers) later. Altman has been unabashed in his pursuit of "AGI," or artificial general intelligence, which can best be described as the Bladerunner sci-fi version of AI.

Speculation aside, the whole ordeal shows just how fragile the backbone of a relatively new but incredibly controversial technology really is. With tons of other companies building products off OpenAI's (potentially legally dubious) generative technology, the shakeup rattled confidence of companies and investors who see AI as the future of business.  

YouTube Admits To Limiting Viewing Experience For Some Users

YouTube is making the viewing experience worse for anybody using ad blocker technology. The company confirmed that people who use ad blockers will experience "suboptimal" viewing experience. In other instances, the company may give users a warning to turn off their ad blocker. If they ignore it three times in a row, they won't be able to watch videos on the platform until they turn it off. 

In a slightly muddier instance, many users allege YouTube is intentionally throttling loading times for videos — unless they use Google Chrome to load YouTube (Google develops Chrome and owns YouTube). The company denies it's limited the experience for users on alternative browsers like Firefox and Microsoft Edge and instead blames the delay on ad blocker loading times. But some users say they don't experience the delay when using Chrome with an ad blocker.

YouTube says its preferred solution for users is to either watch ads or pay for YouTube Premium. Not surprising. But when it comes to content creators earning money from YouTube's ad revenue sharing program as a YouTube Partner, the preference would definitely be for users to use YouTube Premium, since those views earn more money than a typical ad-supported view.

Either way, YouTube's battle against ad blockers is favorable for anybody earning ad revenue money as a YouTube Partner — provided it doesn't deter people from watching videos altogether. 


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