One of the announcements at last week’s Spotify ‘Stream On event was an expansion of its ‘Discovery Mode’ tool.
More artists and labels will now be able to choose tracks for promotion in Spotify’s radio and autoplay features, taking a lower royalty rate in return.
However, the news sparked the latest fierce criticism of Discovery Mode by the US-based Future of Music Coalition.
“Its new wage suppression scheme. It’s perhaps the most brazenly anticompetitive form of payola we’ve seen in digital music,” is how FMC described the tool in the first of a series of tweets yesterday (12 March).
“Reports indicate that Discovery Mode involves a 50% cut in Spotify’s already low rates, in exchange for algorithmic manipulation that boosts these low cost tracks. Bad for artists and bad for fans.”
The ’50% cut’ is FMC’s claim rather than something confirmed by Spotify.
As the program expands, Spotify can expect more public discussion of Discovery Mode’s rate and terms, although Music Ally understands at least one major label-owned distributor is sticking to its guns and declining to offer the tool to its clients.
FMC is a longtime critic of Spotify and of Discovery Mode, so its comments aren’t surprising: the response of the wider industry to its expansion will be fascinating to watch however.
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