The Pop Corporation

Is Spotify great for music listeners? Obviously it is. It has a lot of great music on it and is incredibly convenient for anyone with a phone, a console, a laptop, a tablet… the advent of being able to make your own playlists pretty much reinvented the notion of making mixtapes for yourself or someone else, and no-one can argue that it’s been something of a revelation for the consumer.

However, it isn’t all roses. Fact is, it has been a real mixed blessing for musicians. On one hand, it’s the primary source of discovery for most people trying to find their music, but on the other hand, it is worth almost nothing financially to them. It’s a very fancy way of getting flyers made, ostensibly.

If a band gets a million plays on a track on Spotify, can they quit their jobs and start shopping for speedboats? Absolutely not. And that’s something that’s sticking in the craw of musicians everywhere. Add to that, a disparity in the royalties offered to bigger acts to those down the ladder, it’s a pressing problem that won’t go away.

So what’s going on now? Well, Spotify are rolling out a new Discovery Mode, and it’s being panned in music and label circles.

The Discovery Mode is where a number of users will find new tunes, and as such, could be a useful promotional tool. However, it’ll come with a cost. Spotify will tinker with the algorithm so that relevant music is heard by relevant ears, and of course, it already favours bigger bands with more financial clout behind them. For the smaller artists, Spotify are saying they’ll juice the system in exchange for lowered royalty rates.

That’s a lower rate on something that is already pitifully low as it is. You can see why people aren’t happy. And while it may sound like moaning musicians at it again, it is worth pointing out that without musicians, Spotify is a wasteland. We’re already seeing bands completely swerving the platform altogether to focus on Bandcamp and small batch physical releases.

This news comes on the back of the AI DJ that Spotify announced and in tech circles there’s excitement, but in the artistic circles, there’s a lot of concerned.

“Discovery Mode is a tool through which artists and their teams identify priority songs, and Spotify will add that signal to the algorithms that shape personalised listening sessions,” says Spotify. However, in the blurb, you find that the company are saying just how songs are placed in the mode, and that tracks in it are saved 50% more to playlists than those that don’t appear on it.

Why is that a problem? Well, it all reeks of a modern equivalent of the payola scandals that rocked radio stations for years. On the face of it, it’s Spotify saying ‘pay us for preferable treatment‘.

In some tweets by the Future of Music Coalition (FMC), a music non-profit, they said: “Hearing that Spotify is starting to send around submission information for Discovery Mode, its new wage suppression scheme. It’s perhaps the most brazenly anti-competitive form of payola we’ve seen in digital music.

They continue that this pay cut is “in exchange for algorithmic manipulation that boosts these low-cost tracks” adding “it’s worth asking why an entity that is supposed to be negotiating on behalf of artists is encouraging artists to voluntarily cut their wages.”

Spotify have argued that the number of artists generating over a million dollars (as well as those making more than $10,000) has more than doubled in recent years, but this is a contentious issue that isn’t going to go away any time soon.

Artists are making less money on their releases, while Spotify have become the most powerful music platform on the planet and able to throw money at sponsoring football teams and have more money than Paul McCartney. Something doesn’t add up and, in what was promised to be a great leveller for artists in the digital age, once again, it’s middlemen making all the money.

Spotify doesn’t look like changing any time soon, so will we see a change in approach from musicians, small labels and in turn, listeners? As soon as a better alternative emerges, that’s when the trouble will really start for these big streaming services.