Spotify Accused of Creating ‘Race to the Bottom’ With New Feature
A feature recently added to Spotify could force artists to accept lower royalty rates from the streaming platform, congressmen said in a letter.
House Judiciary Committee Chairman Rep. Jerry Nadler and Subcommittee on Courts, Intellectual Property and the Internet Chairman Rep. Hank Johnson Jr. outlined their concerns in a note sent to Spotify boss Daniel Ek this week. (You can read the entire report at The Hollywood Reporter.)
Announced in November, Discovery Mode was described as an experiment in which “artists and labels can identify music that’s a priority for them, and our system will add that signal to the algorithm that determines personalized listening sessions.” In return for promoting such selected music, artists and labels agree to be paid less than Spotify’s standard rates.
“This may set in motion a ‘race to the bottom’ in which artists and labels feel compelled to accept lower royalties as a necessary way to break through an extremely crowded and competitive music environment,” the letter to Ek said. “Depending on how the program is implemented, there is a further concern that accepting lower rates for this boost in Spotify’s algorithm may not even guarantee more airplay if virtually all commercial artists are also doing the same.”
The congressmen added that artists who saw a significant drop in income as a result of the pandemic might feel pressure to sign up for Discovery Mode in order to avoid missing out. In doing so, they risked the chance of earning even less money and not achieving the hoped-for boost in interest. “Core copyright industries like music play an integral role in the U.S. economy, and the vitality of the industry is undermined when artists’ hard work is undervalued,” they wrote.
They requested further information about the feature from Ek, including whether it's to become permanent, how Spotify would ensure positive results for those who sign up and if lost income would be repaid if artists found the feature didn’t work for them.
The corporation was required to respond by June 16.