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Music / November 3, 2020

Spotify to offer promotion in exchange for lower royalty rates

Credit: Chubo/Shutterstock
Music / November 3, 2020

Spotify to offer promotion in exchange for lower royalty rates

Words: Dylan Murphy

The new feature will offer promotion for lower royalty rates, but “won’t guarantee placement to labels or artists”.

Yesterday, (November 2) Spotify revealed a new feature within their “two-sided marketplace” strategy. The streaming giant announced that it will soon permit artists of all levels and record labels to flag tracks via a ‘Discovery Mode’ feature. This feature will increase the visibility of the chosen track through the algorithm that is utilised in autoplay and Spotify radio.

The function does, however, come at a cost. Artists will not pay any upfront fee, but it will only be available in exchange for lower royalty payments on the selected songs.

In a statement, Spotify said, “In this new experiment, artists and labels can identify music that’s a priority for them, and our system will add that signal to the algorithm that determines personalized listening sessions. This allows our algorithms to account for what’s important to the artist.”

“Labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service.”

Notably, the streaming service said, “If the songs resonate with listeners, we’ll keep trying them in similar sessions. If the songs don’t perform well, they’ll quickly be pulled back.”

Moreover, they have suggested even if you agree to lower royalty rates you are not guaranteed placement within the feature: “Listener satisfaction is our priority—we won’t guarantee placement to labels or artists, and we only ever recommend music we think listeners will want to hear.”