Spotify under fire for 30% “exposure charge” for artists

Streaming giant Spotify has come under fire from artists and other sections of the music industry for cutting royalty payments when songs are found through its Discovery feed.

In expanded plans of its Discovery Mode feature announced last week, Spotify will cut royalty payments these streams in exchange for the exposure that they gain through its algorithm on the feed.

However, Discovery Mode is an opt in feature for artists, meaning if artists wish to make full royalties from streams of their music and decide not to opt in, they will likely have fewer plays.

The Discovery feed is an algorithm-led section of the app, which recommends artists to users based on their usual listening tastes.

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Spotify also takes a smaller, unspecified cut from streams played through its Radio and Autoplay features.

Since the news began to spread, Spotify has come under fire from a number of artists and other members of the music industry. Techno producer LUCA LUSH wrote on Twitter: “The most predatory change to spotify is ‘Discovery Mode’.

“U can now opt in for a 30% reduced royalty rate for increased ‘algorithmic exposure’,” he continued.

“If u dont, less plays vs anyone who has. Ideally for spotify, EVERYONE opts in, they take 30% more revenue & no on gets more plays.

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“Classic prisoners dilemma. The ideal situation would be no one opts in, but the structure forces every manager label & artist to do so if they want to remain competitive on the platform.

“Several members of congress have already denounced the change as a form of digital payola.”

A spokesperson for the streaming giant told MusicTech: “In exchange for promotion, creators agree to a lower ‘promotional’ royalty rate for those streams, where Spotify charges a 30 per cent commission.

“This rate is only for the duration that selected content has opted into the Discovery feed, and only for the portion of streams that occur within Radio & Autoplay,” they continued.

“All other streams of the track in areas outside of Radio & Autoplay remain commission-free.”

Mixmag has reached out to Spotify for comment, with none provided at the time of publishing.

Isaac Muk is Mixmag's Digital Intern, follow him on Twitter