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Three more US Congress members raise concerns over Spotify’s Discovery Mode

By | Published on Thursday 7 April 2022


Three members of US Congress have criticised Spotify’s Discovery Mode service and called for more transparency about how it is being used.

Discovery Mode allows artists and labels to inform the Spotify algorithm about key tracks, thus making it more likely those tracks will be pushed into the ears of subscribers on the streaming platform. However, in return those artists and labels have to accept a lower royalty on any resulting streams.

The scheme has been criticised by plenty of artists and labels since a pilot of it was first announced. Some have equated it to payola – where labels used to pay radio stations to guarantee airplay. And others argue that, while in the pilot phase it may have resulted in artists making more income overall, once everybody is using it, the effectiveness of the scheme will slump.

There has already been criticism of Discovery Mode within the US political community, with Congress members Jerry Nadler and Hank Johnson previously writing to Spotify boss Daniel Ek asking a number of questions about the service.

Now three different Congress members – Yvette D Clarke, Judy Chu and Tony Cárdenas – all co-chairs of the Congressional Caucus On Multicultural Media, have written their own letter to Ek expressing concerns about all things Discovery Mode.

In their letter – published by Variety – they write that, as they understand it, Discovery Mode “is unfair to both artists and consumers because … it lacks transparency”.

“Choosing to accept reduced royalty payments is a serious risk for musicians, who would only benefit if Discovery Mode yields more total streams for an artist across their entire catalogue, not just the track covered by the programme”, they go on.

“And if two competing artists both enroll their newest track in the programme, any benefit could be cancelled out, meaning that the only profit goes to your company’s bottom line. For artists of diverse backgrounds, who often struggle to access capital, the premise that they must now pay in order to be found by new consumers on Spotify represents an especially serious problem”.

To overcome the transparency issues, they then write. “We would ask that Spotify publish, on a monthly basis, the name of every track enrolled in the programme and the royalty discount agreed upon. Without this transparency, you are asking artists to make a blind choice, and it represents a classic prisoner’s dilemma”.

And consumers deserve this transparency too, they add. “Spotify fails to tell consumers that they are listening to paid content when it feeds them Discovery Mode songs. 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 taste and no ads if you are a premium member'”.

“Based on our understanding of the programme”, they say, “this appears to make Discovery Mode a straightforward example of misleading native advertising, which preys on unwitting consumers, and has been a recent area of enforcement activity by the Federal Trade Commission. The Discovery Mode programme seems identical to deceptive native advertising like undisclosed promotional tweets from paid social media influencers or inadequately described sponsored search results”.

We await to see how Ek responds.