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If you’re a producer, you might have heard of Spotify’s brand new feature they (secretly) rolled out a few weeks ago. Spotify announced that artists can choose to receive less per stream for their tracks to air in personalized feeds. Quite honestly, this couldn’t have come at a worse time for the tech giant regarding its reputation amongst the wider artist community.
When we heard about Discovery, at first thought we were interested in it. Why wouldn’t someone reduce costs slightly for potentially a larger audience hearing your music, snowballing your algorithm into more streams. The more and more we read into it though, the more we understood how horrible this is. For absolutely no guarantee, Spotify could reduce your royalty pay out and only pitch your music reach out to a handful of people. These people might not even be active listeners. Unfortunately, this really doesn’t make sense in the short or long run.
While we were contemplating the option, we reached out to our Label Manager contact at inGrooves and he clarified a few things and cemented our current opinion on Discovery Mode. He explained that Universal (inGrooves), much like all other majors (and larger indie distros) are against it as it dilutes the value of a stream. Furthermore, looking outside of the artist’s vantage point, you have investors and shareholders in Spotify. This move isn’t exactly popular amongst those heavily leveraged in Spotify.
“And to be honest, not sure how long it [Discovery Mode] will be able to be utilized as all of these companies are also shareholders in Spotify. At some point these shareholders rejection of this “pay to play” model will be based on the fact that it is something Spotify said they would never allow. Yet they are doing it now, as essentially they are keeping half of what that stream was worth to place your track. At some point this year when there is a shareholders meeting, this will certainly be raised as a major issue here.”
I get wanting numbers, but personally I (after a couple days of research into the topic) think devaluing content even further is not the direction content creators and artists should be headed towards.
Lastly, and this one might be a bit of a stretch, but Discovery is essentially a pay to play system. Instead of paying into the system, you’re taking a pay cut. As a newly-found Sports Gambler who has made a few hundred on some bets (humble brag) – this could lead to a bit of casino syndrome in that you have to feed the machine to get consumption, and that consumption is not actual engagement but rather placement.
The goal should be to create an engaged fanbase, and I am not sure this system is conducive to that. And from the last few days researching the topic, I’m not alone in this thinking.
Moving forward Swerve Collective Creations needs to start venturing into other avenues for growth. Historically, we’ve spent the majority of our promo budgets per track on Spotify. Currently, it’s not sustainable. And seeing the trajectory of Spotify’s (and all other major streaming platform) royalty payouts, it’s time to resource elsewhere.
Want to learn even more? This YouTuber did an amazing job stating the facts.