Is Spotify's Discovery Mode payola in disguise?
"There's good cholesterol and bad cholesterol, but there isn't good payola and bad payola. There's just payola" - Music REDEF's Matty Karas argues about Spotify's Discovery Mode, which allows indie artists to chose which songs they want to be played more on the streaming service, in return for a lower royalty rate. "If major labels have a built-in advantage on Spotify playlists, another way to put indie artists on an equal playing field would be to allow them to single out tracks for playlist consideration and *not* charge them for it. Call it Discovery Mode and don't change a thing about it except the price" - Karas points out. Two law professors on Billboard argue it's not really band kind, whereas Future of Music Coalition sees it through the lens of payola.
In the case of the new Spotify "discovery mode" program, the additional factor at work is monopsony--where a dominant market player uses its dominant position to drive down worker compensation (in this case by cutting royalties in half).— Future of Music Coalition (@future_of_music) July 7, 2021