Reducing Artists’ Royalties for Promotion — Haven’t We Heard That Before? (Guest Column)
Spotify's Discovery Mode allows artists and labels to choose specific tracks to be algorithmically served to listeners, but cost of access is a reduced royalty.
A2IM, the independent label community and Music Managers Forum-US (representing its membership of artist managers and self-managed artists), fully support the concerns about Spotify’s Discovery Mode program expressed by the Artists Rights Alliance and so many of the artists we work with.
Spotify is marketing Discovery Mode as a tool that allows artists and labels to choose specific tracks to be algorithmically served to listeners. What is important to note about this program is that access to this tool is available only to artists who are willing to accept a reduction in royalty payment for the track’s inclusion in the program. Listeners will be presented with songs based on the acceptance of a much lower payment to artists. This will move significant amounts of money away from artists who so badly need it, and it represents a dangerous fundamental change to the value of music. Many artists have already said that they are not making enough from streaming to survive on, yet this program will create the conditions for a race to the bottom, reducing the overall royalties paid to artists.
At the moment, Spotify says Discovery Mode will only apply to the radio and autoplay playlists (the tracks you hear when the playlist or album you were listening to ends). Make no mistake, Spotify is explicitly clear that they intend to expand this “pay for play” program to other “personalized” areas of the service.
More opportunities to connect with new listeners and innovative tools are always appreciated, but Discovery Mode brings into question the credibility of Spotify’s recommendation engine. From its beginning Spotify proudly stated that it would be a good partner and maintain a democratized service that would never allow the proverbial “thumb on the scale.” Again, and again, we were assured that all artists would have a fair and impartial chance of success. We were promised that the quality of the music and the preferences of listeners would determine success — not money. “Discovery Mode” breaks that promise. Discovery Mode allows money to be a deciding factor as to which music is surfaced to listeners. Discovery Mode tilts what had been a level playing field for artists. Discovery Mode misleads listeners who believe they are being presented with music based exclusively on their established preferences.
Spotify began as a revolutionary champion of artists and rights holders that promised to save the recorded music industry from piracy and payola. For 13 years, Spotify, recording artists, and rights holders have worked symbiotically towards a shared vision, to build an equitable global music streaming economy. Now, having supplanted the previous gatekeepers, we urge Spotify not to abandon its founding values and intentions.
We respectfully request that Spotify guards itself against the impulses that every previous dominant gatekeeper in our industry has surrendered to. We humbly ask Spotify to consider the well-being of each and every hard-working artist and rights holder, and the tens of thousands of people who work to support them. There has never been a more important moment to honor the integrity of the system that Spotify has built, than during this unprecedentedly challenging time when other revenue streams such as touring have been eliminated. We beg you to put the long-term health of our shared industry ahead of the pursuit of increased margin. Please work with us to create growth opportunities that are in line with your founding values and intentions. We want to continue our collaboration as great partners.
A2IM is a 501(c)(6) not-for-profit trade organization headquartered in New York City that exists to support and strengthen the independent recorded music sector. Membership currently includes a broad coalition of nearly 700 independently-owned American music labels. A2IM represents these independently owned small and medium-sized enterprises’ (SMEs) interests in the marketplace, in the media, on Capitol Hill, and as part of the global music community. In doing so, it supports a key segment of America’s creative class that represents America’s diverse musical cultural heritage. Billboard Magazine identified the Independent music label sector as 37.32 percent of the music industry’s U.S. recorded music sales market in 2016 based on copyright ownership, making Independent labels collectively the largest music industry sector.