Spotify Faces Lawsuit Over Discovery Mode Feature

Spotify is facing a new lawsuit in the US accusing its “Discovery Mode” feature of being a “modern form of payola.” The complaint reignites the debate about fairness, transparency, and the growing role of algorithmic promotion in the streaming industry.

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1. What the lawsuit is about

The Discovery Mode feature allows artists and labels to accept a reduced royalty rate in exchange for increased algorithmic exposure.
The plaintiff argues that this setup is essentially “pay for play” and violates fair-competition rules — echoing the radio “payola” scandals of past decades.

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2. Why it matters

• Algorithmic fairness: Smaller acts may lose ground if exposure can be bought via royalty concessions.

• Transparency in promotion: The case raises questions about how streaming platforms disclose promotional prioritization.

• Industry ethics: Spotify insists Discovery Mode is optional marketing, yet critics call it structurally unfair.

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3. Implications for promotion strategies

In an algorithm-driven environment, independent promo remains vital:

• Radio and DJ promotion help build reach outside algorithmic filters.

• Playlist pitching should target curated lists over automated ones.

• AI analytics tools can track feature impact and optimize campaign spending.

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Conclusion

Whether or not the lawsuit succeeds, it underscores the growing demand for transparency and ethical standards in streaming. For artists, the takeaway is clear: success depends not only on the song, but on where and how it’s promoted.

If you like, we can support you with playlist, radio and digital promo strategies to make your music more visible – especially during change.