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Spotify is offering artists lower royalty rates in exchange for exposure

A ‘new experiment’ will allow artists to influence what music the platform recommends to listeners, but critics are questioning whether the trade off in royalties is worth it

Spotify has unveiled a new feature aimed at artists and labels wanting to gain more control over their exposure on the streaming service. According to a statement from the platform published Monday (November 2), the feature will give artists “at any stage of their careers” a chance to influence what music will be recommended to listeners.

“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,” the statement reads. The intention is that this will help artists to highlight “a song they’re particularly excited about, an album anniversary they’re celebrating, (or) a viral cultural moment they’re experiencing”.

In an attempt to make the new feature more “accessible”, it won’t entail any upfront costs, but will instead depend on reduced royalty rates for the labels or rights holders involved. “Labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service,” Spotify explains.

Though that “promotional recording royalty rate” hasn’t been made public, “it does not mean lower royalties,” Spotify’s product marketing lead Charleton Lamb tells Music Ally. “If a track is performing well, rightsholders can see a positive ROI. And if they don’t, they can turn it off.”

However, both musicians and industry experts have expressed concerns about the new feature, questioning whether it will benefit smaller artists as much as their more established counterparts.

Other critics claim that Spotify’s offer to trade revenue for exposure only adds to the long-documented issues surrounding the platform’s payment of artists. As the Union of Musicians and Allied Workers recently pointed out through its “Justice At Spotify” campaign – which has been signed by over 16,000 artists – the current average streaming royalty is just $.0038.

While the UMAW campaign calls for the platform to up its pay to at least one cent per stream, it also advocates more clarity and transparency in Spotfy’s deals with artists. Predictably, the union has pushed back against Spotify’s proposition of lowered royalty rates.

Besides the reduced royalty payments, the new Spotify feature won’t actually guarantee placement in listeners’ playlists. “If the songs resonate with listeners, we’ll keep trying them in similar sessions,” the streaming platform writes. “If the songs don’t perform well, they’ll quickly be pulled back.”

For now, these changes – if artists opt in – will only affect the platform’s Radio and Autoplay formats, where listeners are generally on the lookout for new music, though the statement adds: “As we learn from this experiment, we’ll carefully test expanding to other personalized areas of Spotify.”