Spotify’s Discovery Mode feature faces renewed criticism by US Congress

nme.com:

Spotify is facing renewed criticism from US Congress over its Discovery Mode feature, which allows artists to receive additional exposure for a reduced royalty rate.Three Congress members – Yvette D.

Clarke, Judy Chu and Tony Cardenas, who represent the Congressional Caucus on Multicultural Media, have sent a letter to Spotify CEO Daniel Ek criticising the feature.In exchange for a boost in visibility, artists and their labels agree to receive a “promotional” royalty rate on those streams, believed to be lower than the standard rate through the feature, which was announced in November 2020.Highlighting this issue, the letter said via Variety: “Choosing to accept reduced royalty payments is a serious risk for musicians, who would only benefit if Discovery Mode yields more total streams for an artist across their entire catalogue, not just the track covered by the program.”“And if two competing artists both enroll their newest track in the program, any benefit could be cancelled out, meaning that the only profit goes to your company’s bottom line.

For artists of diverse backgrounds, who often struggle to access capital, the premise that they must now pay in order to be found by new consumers on Spotify represents an especially serious problem.”It added: “We would ask that Spotify publish, on a monthly basis, the name of every track enrolled in the program and the royalty discount agreed upon.

Without this transparency, you are asking artists to make a blind choice, and it represents a classic prisoner’s dilemma.”The letter also accuses the streaming platform of a lack of transparency for consumers in Discovery Mode.“Regarding consumers, they too deserve transparency,” it continues.