New Spotify Promotional Rate for Artists Stirs Up Controversy
At the beginning of November, Spotify announced a new service for musicians, artists, and labels enabling them to identify music that’s a priority to them and then use personalized algorithms created by Spotify to reach relevant listeners.
While there’s no upfront cost to the service, it is in no way free. According to Spotify, anyone who wants to use the feature must agree to receive a “promotional recording royalty rate” for streams that come via this feature. Though the company hasn’t yet revealed what the promotional rate will be, many artists are already up in arms.
Musician rights advocate and singer-songwriter David Lowery said, “This is a form of payola or sponsored social media post. It is not necessarily illegal, but the tracks would need to be labeled.” Adam Neely, Youtuber and composer, has called the service a “payola, but way worse.”
Attempting to explain the feature, Spotify Product Marketing Lead Charleton Lamb said, “We were looking for a model that was acceptable, more democratic and fair…The model is going to allow even really small artists to access promotions at the same terms of the biggest labels.”
While Spotify is touting the benefits of its new feature, it also expressed hesitance. On the blog, it was described as a “new experiment.” The post reads, “We’re testing this to make sure it’s a great experience for both listeners and artists. To start, we’ll focus on applying this service to our Radio and Autoplay formats, where we know listeners are looking to discover new music.”
Even though the feature will only target certain areas, the goal is for artists to see a general increase in popularity even in the areas without it. This will make receiving the lower promotion rate worthwhile. Artists also have the option to stop using the service or turn off the promotion for specific tracks if they see it’s not working as they would have wanted.
Not the First Spotify Controversy
Spotify is no stranger to controversy. In 2018 it angered users with its extreme promotion of a Drake album. It’s also the target of the Justice At Spotify campaign, launched by the Union of Musicians and Allied Workers and endorsed by more than 15,000 artists. The campaign seeks to increase stream royalties from $.0038 to $.01.
The Union recently posted on Instagram, “Under Spotify’s current average royalty rate payout is around 0.380 cents. This means it takes: 263 streams to pay out one dollar. 786 streams to buy a cup of coffee. ~284,000 streams to pay the median US monthly rent. ~658,000 monthly streams to make $15/hour.”
With regards to the new royalty promotion, the Union isn’t having any of it. It mocked Spotify with a new Instagram post, “15,000 music workers: ‘We demand increased royalty payments and an end to payola.’ Spotify: *Lowers royalty payments in this payola scheme.”