3 Things To Know About Spotify’s Controversial New ‘Pay For Influence’ Tool, Discovery Mode

Spotify has announced that it would soon be testing a controversial new tool called ‘Discovery Mode’ that will allow artists and record labels to influence the algorithm that selects what music is played when users use the streaming platform’s auto-play or personalised radio functionality.

Artists and labels aren’t required to pay anything up front for this, but by opting in, they agree to being paid a lower recording royalty rate for streams in those personalized sessions (in Radio and Autoplay).

This is a development many artists and labels will welcome, although the costs associated with accessing the new service is proving controversial in some quarters. David Lowery, for example, suggested via a tweet that “This a form of payola [The Urban Dictionary defines Payola as ‘Music Biz Prostitution’] or sponsored social media post. It is not necessarily illegal but the tracks would need to be labeled”.

So is Discovery Mode a form of payola, or merely a way to “give artists a say in how their music is discovered?”.

Here are three things you should know about the new service…

1) Spotify already drives 16 billion artists discoveries every month…and it says that artists should get a say in what fans are discovering.

Spotify claims that it drives 16 billion artist discoveries every month.

As the company explained in its blog post announcing Discovery Mode, this means that 16bn times a month, Spotify’s 320 million monthly users will hear an artist they have never heard before on Spotify.

According to Spotify, now artists should also get a say in the selection of songs made by its algorithm for personalized listening sessions.

Spotify wrote in its blog post that “artists tell us they want more opportunities to connect with new listeners, and we believe our recommendations should also be informed by artists – their priorities and what they have to say about their music. And soon, we will roll out a test of a service that gives artists a say in how their music is discovered”.

2) It’s going to cost artists and labels in royalties – but Spotify says they could see “Positive ROI”…

Spotify revealed in its blog post, artists and labels using the new service won’t have to pay anything upfront. Instead, when an artist or label asks the algorithm to prioritise a track, a lower recording royalty rate will then be paid on any subsequent streams that the algorithm generates.

Spotify stresses that the promotional recording royalty rate will only be paid for streams in Radio and Autoplay, the places where Spotify is providing its Discovery Mode service, and that streams outside of these formats will be unaffected.

3) The Discovery Mode experiment is starting with Radio and Autoplay – but could expand to other areas on Spotify…

Spotify states that, while it will initially only focus on applying recommendations via Discovery Mode to Radio and Autoplay, it will “carefully test expanding to other personalized areas of Spotify” as it learns from “this experiment”.

Spotify hasn’t specified the exact other areas where Discovery Mode might be tested in next. But if, for argument’s sake, it was Spotify’s personalized Made for You playlists, questions could be raised about how ethical it was to allow a large record label that can afford to pay a lower recording royalty rate to influence what goes into these playlists. And whether those record labels were effectively paying to gain market share.

Additionally, Discovery Mode is notably referred to as a ‘test’ and an ‘experiment’, but Spotify’s blog post doesn’t specify when it will be launched as a permanent tool for artists and labels to use.

Source: https://www.musicbusinessworldwide.com