In November 2020, Spotify published an opaque headline on its company blog: “Amplifying Artist Input in Your Personalised Recommendations.” The post introduced a new program called Discovery Mode, which would ask artists to accept lower royalty rates in exchange for algorithmic promotion. It was pay-to-play, but Spotify introduced the scheme using neutral language: artists would be able to “identify music that’s a priority for them”, which would become one of “thousands” of data inputs influencing how Spotify delivers “the perfect song for the moment, just for you”. Rather than charge an upfront fee, “labels or rights-holders agree to be paid a promotional recording royalty rate for streams in personalised listening sessions where Spotify provided this service”.
Participating artists and labels take a 30% royalty reduction on tracks enrolled in the program, when they are discovered through its channels. Only tracks more than 30 days old are eligible. Notably, there have been no signs that Spotify plans to publicly label which songs are enrolled: a lack of disclosure that has caused many music advocacy groups to liken Discovery Mode to the radio payola of the 1950s, which was eventually outlawed by the US Federal Trade Commission. (Though the company points out that it has published a broad guide to understanding recommendations on Spotify, including a paragraph on “commercial considerations”.)
