Nadler & Johnson Request Information on Spotify's "Discovery Mode" Feature
Feature may create “race to the bottom” as artists and labels feel compelled to accept lower royalties to break through competitive music environment
Washington, D.C. -- On June 2, House Judiciary Committee Chairman Jerrold Nadler (D-NY) and Subcommittee on Courts, Intellectual Property, and the Internet Chairman Henry C. "Hank" Johnson, Jr. (D-GA) sent a letter to Spotify Founder and CEO Daniel Ek requesting information on the platform's "Discovery Mode" feature, which allow artists and record labels to identify particular songs that they would like to prioritize in Spotify's recommendations in exchange for agreeing to be paid a lower, "promotional" royalty rate. In their letter the Members wrote, "At a time when the global pandemic has devastated incomes for musicians and other performers, without a clear path back to pre-pandemic levels, any plan that could ultimately lead to further cut pay for working artists and ultimately potentially less consumer choice raises significant policy issues...Core copyright industries like music play an integral role in the U.S. economy, and the vitality of the industry is undermined when artists' hard work is undervalued. Such a race to the bottom threatens to weaken the core goal of copyright and intellectual property—incentivizing creativity by offering a fair return on one's work." Full text of the letter can be found below and here: June 2, 2021 Daniel Ek
At a time when the global pandemic has devastated incomes for musicians and other performers, without a clear path back to pre-pandemic levels, any plan that could ultimately lead to further cut pay for working artists and ultimately potentially less consumer choice raises significant policy issues. This is particularly true under Spotify's current model, where artists' returns are already low, with Spotify reporting to pay artists less than a cent per song streamed (estimated in the $.003 to $.005 range) and Spotify has challenged an administrative ruling setting a higher royalty rate for songwriters. Core copyright industries like music play an integral role in the U.S. economy, and the vitality of the industry is undermined when artists' hard work is undervalued. Such a race to the bottom threatens to weaken the core goal of copyright and intellectual property—incentivizing creativity by offering a fair return on one's work. To better understand the design and proposed implementation of the Discovery Mode tool and the impact that it will have on artists, we ask that you provide additional information in response to the following questions: 1. Does Spotify intend to make this pilot program a permanent one, and if so, when does it anticipate that it will begin?
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