Spotify’s controversial policy that sets a reduced royalty rate for artists whose music is promoted on the digital streaming platform’s Discovery Mode feature has once again caught the attention of several members of Congress.
Representatives Yvette D. Clarke (D-NY), Judy Chu (D-CA), and Tony Cardenas (D-CA) representing the Congressional Caucus on Multicultural Media have written to Spotify CEO Daniel Ek asking that the service label these songs as paid. content.
“We would ask Spotify to publish, on a monthly basis, the name of each track entered into the program and the agreed royalty reduction,” reads the letter, which was obtained by Variety, said in part. “Without that transparency, you’re asking artists to make a blind choice, and that’s a classic prisoner’s dilemma.”
The three lawmakers aren’t the first to ask Ek about the policy, which Spotify instituted in 2020. Representative for House Judiciary Committee Chairman Jerry Nadler (D-NY) and the Courts, Property and Courts Subcommittee intellectual and internet chairman representative Hank Johnson Jr (D-GA) wrote to Ek last July asking for more information on the policy and expressing concern that it “could spark a” race to the bottom. low” in which artists and labels feel compelled to accept lower royalties as a necessary means of breaking through in an extremely crowded and competitive music environment.
Washington’s latest letter, which was sent to Ek in late March, also calls for transparency for consumers about what music they can hear through Discovery Mode.
“Spotify fails to tell consumers that they are listening to paid content when it provides them with songs in discovery mode. We believe there is no meaningful distinction between paying a lower royalty rate and accepting payment for placement on the service. In fact, Spotify advertises to listeners that its Radio feature offers “continuous music based on your personal tastes and no ads if you are a Premium member”…. On the Based on our understanding of the program, this appears to make Discovery Mode a straightforward example of deceptive native advertising, which preys on unwitting consumers, and has been a recent area of enforcement activity by the Federal Trade Commission.
Regarding Washington’s latest investigation, a Spotify spokesperson told Variety, “Artist and label teams have told Spotify for years that they want more agency to reach new listeners and generate revenue. meaningful connections on our platform – Discovery Mode, in its initial phase, offers just that. We have been transparent about the use of Discovery Mode and the associated business considerations for our users and partners by publicly discussing this testing in numerous forums and describing its use in the user experience. Overall, the response to Discovery Mode from our listeners and partners has been overwhelmingly positive and we will continue to be transparent about how it works.
