On Wednesday, House Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) and Subcommittee on Courts, Intellectual Property, and the Internet Chairman Henry C. Johnson, Jr. (D-Ga.) announced that they have questioned the music streaming platform Spotify Technology S.A. about its new mode that allows musicians to pay to have their songs recommended on Spotify’s app.
The letter they sent expressed concern that the feature may foment a “race to the bottom” as artists and recording labels may feel obligated to accept lower royalty rates to enhance their edge in the competitive music industry.
The representatives explained that Spotify’s Discovery Mode feature allows artists and 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 to Spotify Founder and CEO Daniel Elk, Reps. Nadler and Johnson posed several questions about the design and proposed use of the Discovery Mode tool. The legislators explained that they want to understand the impact the feature will have on artists, who amidst the COVID-19 pandemic have suffered substantial income loss.
The letter asked what kind of safeguards are in place to prevent most or all artists from forcibly accepting lower royalties if the program becomes the only realistic conduit through which songs can be recommended. The representatives also queried how the lower royalty rate will be calculated, and how artists will be able to measure the impact of program participation on their stream count.
The legislators stated that they want to engage with Spotify in order to protect artists and the music business. “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,” the letter explained. “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.” Reps. Nadler and Johnson have asked Spotify to respond to their letter by June 16.
