This past weekend, at Spotify’s Stream On event, they announced an expansion to their Discovery Mode, a program that promotes artists’ music higher on the platform’s algorithm in exchange for a lower royalty rate.
Spotify’s Discovery Mode has been a source of contention among the music industry as those who agree to receive less payment in royalties can have their music heard at a greater rate on Spotify Radio and autoplay.
This mode was previously only offered to labels but is now being offered directly within Spotify for Artists to allow independently distributed artists and labels to increase their listenership.
Managers are eager for this expansion due to its ability to increase visibility directly on the listening platform.
But industry professionals and Congress worry it will eventually decrease the share of royalties given to an artist or label as it could become the standard way artists on the platform will have their music actually heard.
Congress also questions if this process meets the guidelines set by the Federal Trade Commission that notes “disclosures of paid content” should be “clear and conspicuous.”
Spotify countered these claims stating, “To ensure the tool is accessible to artists at any stage of their careers, it won’t require any upfront budget. Instead, labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service.”
Second image from Spotify
