Artists criticise Spotify’s Discovery feed for deducting 30% of royalties in exchange for exposure
“In exchange for the promotion, creators agree to a lower ‘promotional’ royalty rate for those streams, where Spotify charges a 30 per cent commission.”
Image: Seemanta Dutta / Alamy Stock Photo
Modern recommendation algorithms are powerful tools, suggesting to consumers the content that they potentially want to hear, read, and watch. Spotify’s algorithm may be useful to its users but the company is now facing a new wave of criticism from artists after reports that it cuts royalty rates if a song is found by a user on the Discovery feed. Luca Lush, Benn Jordan, John Michie and more are among the artists condemning the new feature.
It’s been rumoured that royalties could be cut by up to 50 per cent – but Spotify’s customer service dispels these reports and assures MusicTech it is 30 per cent.
“In exchange for the promotion, creators agree to a lower ‘promotional’ royalty rate for those streams, where Spotify charges a 30 per cent commission. This rate is only for the duration that selected content has opted into the Discovery feed, and only for the portion of streams that occur within Radio & Autoplay. All other streams of the track in areas outside of Radio & Autoplay remain commission-free,” the streaming giant tells us.
Discovery could still prove a useful tool for artists and record labels; it makes use of Spotify’s algorithm to potentially pull in more listens, which in turn increases an artist’s exposure. Spotify has even mentioned that statistical modelling shows that artists see on average an additional 50 per cent in track saves, an additional 44 per cent in user playlist adds, and an additional 37 per cent in artist page follows during the first month of the Discovery feed.
Despite the benefits, there has been a wave of criticism since the feature’s launch from artists, groups and independent labels. Universal Music Group announced in a New Years memo to its staff that it has been working with Tidal and Deezer to develop “an innovative new economic model for music streaming,” before calling out the “bad actors” in the streaming space. At the time of writing, Universal Music Group has not announced Spotify as a partner in the initiative.
Esteemed producer Luca Lush, DJ champion ESKEI83 and producer Benn Jordan (The Flashbulb) are among those criticising the platform.
The most predatory change to spotify is “Discovery Mode”
U can now opt in for a 30% reduced royalty rate for increased “algorithmic exposure”
If u dont, less plays vs anyone who has
Ideally for spotify, EVERYONE opts in, they take 30% more revenue & no one gets more plays 🥲
— LUCA LUSH (@LUCALUSH) March 10, 2023
While it's easy to be enraged by the Spotify Discovery payola program, the bigger story is that this is the first time they've actively put subscriber experience and growth at risk, as paid placement will degrade the algorithm quality.
The post-blitzscaling squeeze is real. ⚰️
— Benn Jordan (@bennjordan) March 14, 2023
Just saying.. I tried discovery mode on spotify… I saw no increase in plays or listeners… likely getting 30% less for pissing around with it though
— John Michie (@johnmichiemusic) March 10, 2023
The fact that Spotify’s Discovery Mode is even a thing shows that ITS NOT AN EVEN PLAYING FIELD OUT HERE https://t.co/ax7KLEEUzX
— PAY ATTENTION TO MEEEE out now (@BoyJrMusic) March 10, 2023
everyone seems to be mad at Spotify for discovery mode, but y’all should be mad that this tool is only available for selected artists. this is what’s really upsetting. not the 30% they cut from the extra streams they generate. I don’t know anybody in my circle who has access. U?
— ESKEi83 (@ESKEI83) March 11, 2023
In more recent news, the streaming giant has just ended its first pilot scheme of the new Discovery Mode.
Get the latest news, reviews and tutorials to your inbox.Subscribe