Oh Spotify, asking artists to take less money in any situation is not going to go well. The company announced a new initiative that would allow artists to boost tracks in recommendation algorithms if they agree to a “promotional” royalty rate. That promotional rate would be lower, but Spotify is not saying how much lower. "Labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service,” says Spotify in a statement.
Royalty rates in the current state are already hard to calculate, but it is low. Tracks would get pushed to playlists like Discover Weekly, autoplay and Spotify’s radio features.
"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. "This allows our algorithms to account for what’s important to the artist."
One caveat is that there are no guarantees that your song will be placed in any playlists.
"Listener satisfaction is our priority—we won’t guarantee placement to labels or artists, and we only ever recommend music we think listeners will want to hear."
However, in an interview with Music Ally, Spotify’s product marketing lead Charleton Lamb insists that royalties for artists won’t be lower, despite the rates being lower. “It does not mean lower royalties,” he said. “If a track is performing well, rightsholders can see a positive ROI [return on investment]. And if they don’t, they can turn it off.”
Artists in this instance will have to gamble that this would work, but the lower income could be dangerous at a time without any live income. We will see given the artist backlash if Spotify goes through with the tested feature or if there are any labels willing to push artist tracks and face the backlash from their artists. It could still work for some artists, but it may not for many, especially if they don't get placements.