Spotify investigated by Congress for controversial “Discovery Mode” function
Spotify is being explored by Congress due to ongoing concerns about the platform Discovery mode Feature.
Spotify’s Discovery Mode was announced last November as a pilot program for artists who can opt for a partial payout in the exposure. For a fee, Spotify agrees to move music to various personalized playlists, which arguably could be a useful tool for lesser-known artists – as long as they’re protected.
In the words of Spotify, “Labels or rights holders agree to pay an advertising recording license fee for streams in personalized listening sessions where we have provided this service.” However, the success of a particular track still rests with the listeners and the entire stream.
The Discovery Mode feature is under scrutiny for a variety of reasons. Most glaringly, the platform pays such low license fees to artists per stream. In addition, a comment by Rolling Stone, citing the Alliance for artist rights calls it “Money Grab” and a form of “Payola”. Our particular concerns about function are outlined here.
To the Congress that interferes. A letter from Representative Jerrold Nadler (Chairman of the House Judiciary Committee) and Representative Hank Johnson Jr. (Chairman of the Subcommittee on Courts, Intellectual Property and the Internet), addressed to Spotify CEO Daniel EkHe has concerns about Discovery Mode – a potential “race to the bottom” as artists seek to “break through an extremely crowded and competitive music environment.”
Nadler and Johnson write: “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 could ultimately lead to salaries for working artists cut further and ultimately possibly less. “Consumer choice raises significant political questions.”
Congress calls on Spotify to expand the pilot program extensively, including if and when the feature will become permanent, how the platform prevents a “race to the bottom” scenario, how to calculate the “advertising license rate”, how to measure the extent of impact and whether artists can get back lost royalties if the program doesn’t lead to increased streams.
Spotify’s response is expected by June 16.
Read the letter in full here.
Sources: The Hollywood Reporter, Pitchfork, Rolling Stone