In November, Spotify unveiled a controversial new tool called Discovery Mode, which allows artists and record labels to identify a track to prioritize in listeners’ personalized auto-play or radio feeds.
By participating, artists and labels agree to pay a lower recording fee for streams in these personalized sessions (in radio and autoplay).
You can unsubscribe, and if you do, the track will continue to play in radio and autoplay, but it will not be prioritized and you will then receive the standard license fee for those streams.
In a blog post on “Discovery Mode” last year, Spotify called the new tool an “experiment” that initially only focuses on applying recommendations about Discovery Mode to radio and autoplay. The company added that it “will carefully test the expansion to other personalized areas of Spotify”.
The feature immediately drew criticism from artists when it was announced last year. For example, David Lowery suggested in a tweet, “This is some form of Payola or sponsored social media post. It’s not necessarily illegal, but the tracks would have to be labeled. “
Members of the US Congress now also have some questions for Spotify about the feature.
In a letter to Spotify CEO Daniel Ek last week, House Justice Committee Chairman Jerrold Nadler (D-NY) and Subcommittee on Courts, Intellectual Property, and Internet Chairman Henry C. “Hank” Johnson, Jr. (D-GA) have requested more information on Discovery Mode.
In the letter, members of House Judiciary Ek asked to answer five questions about the Discovery Mode, including if and when the experimental function will be converted into a permanent program and “what types of safeguards will be in place to ensure” that one Situation does not arise when “the only practical way to be recommended is to accept a reduced license fee”.
They also ask how Spotify plans to calculate the reduced “advertising” license fee and have given Ek until June 16 to respond.
“Core copyright industries like music play a vital role in the US economy, and the vitality of the industry is undermined if the hard work of artists is underestimated.
Letter from the House of Representatives Judiciary Committee
Reads the letter: “At a time when the global pandemic has devastated the incomes of musicians and other artists with no clear path back to pre-pandemic levels, a plan could ultimately lead to further cuts in salaries for working artists and could ultimately lead to fewer consumers, voting raises significant political questions. “
It added, “Core copyright industries like music play a vital role in the US economy, and the vitality of the industry is undermined if the hard work of artists is underestimated.
“Such a race to the bottom threatens to weaken the core objective of copyright and intellectual property – to offer incentives for creativity through a fair return on one’s own work.”
You can read the letter in full below:
Dear sir. Ek,
We write about the new “Discovery Mode” Feature that Spotify started piloting its radio and autoplay features. Though public details are limited, Discovery Mode appears to allow artists and record labels to identify specific songs that they want to prioritize in Spotify’s algorithmic recommendations in exchange for a lower “promotional” license fee for them Agree to prioritized streams. This can start a “race to the bottom” that will force artists and labels to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment. Another concern, depending on how the program is implemented, is that accepting lower prices for this boost in the Spotify algorithm may not even guarantee airplay if virtually all commercial artists are doing the same.
At a time when the global pandemic has devastated the incomes of musicians and other artists, with no clear path back to pre-pandemic levels, any plan that ultimately throws up further cuts in salaries for working artists and ultimately too less choice for consumers could lead to significant policy issues. This is especially true of Spotify’s current model, where artist returns are already low, with Spotify claiming to pay artists less than a cent per song streamed (estimated in the $ 0.003 to $ 0.005 range) and Spotify having one Administrative decision challenged setting a higher license fee for songwriters. Core copyright industries like music play a vital role in the US economy, and the vitality of the industry is undermined if the hard work of artists is underestimated. Such a race to the bottom threatens to weaken the core goal of copyright and intellectual property – to offer incentives for creativity through a fair return on one’s own work.
To better understand the design and proposed implementation of the Discovery Mode tool and the impact it will have on artists, we ask that you provide additional information in response to the following questions:
1. Does Spotify intend to make this pilot a permanent one, and if so, when is it likely to start?
2. What kinds of safeguards are in place to ensure that large numbers of boosts under the Discovery Mode program do not cancel each other out or otherwise result in a race to the bottom, the only practical way to be recommended is to accept a reduced license fee?
3. How does Spotify generally calculate the reduced “advertising” royalty rate that an artist or record company must accept in order to use the Discovery Mode program? Is this calculation the same for all artists and labels?
4. How can artists and record labels measure the program’s impact on their streams, including streams made available directly from participating in the Discovery Mode program?
5. What legal remedies, if any, are offered to artists to reclaim lost royalties if they discover that participation in the program did not result in increased streams?
Thank you for your attention and look forward to your answer by June 16, 2021 at the latest. Should you have any questions in the meantime, please do not hesitate to contact one of our employees.
With best regards,Music business worldwide