Spotify has built its success on features that feel indispensable — from personalized daylists, blends with other users and the ubiquitous popularity of Spotify Wrapped. However, the platform’s public appeal has started to crack, as more users have begun to scrutinize its corporate practices concerning the treatment of music artists. As we pore over and analyze our 2025 Wrapped results, it’s worth taking a step back to ask: Is Spotify systematically hurting its own musicians to increase its profit margin?
The Swedish tech company originally operated much like a search tool, built around listeners intentionally seeking out artists and albums. But after years operating as one of the top streaming services, Spotify’s inside data revealed something more profitable: Users want a music experience curated especially for them, signaling a shift from simple user access to a musical guide. In 2020, this model — Discovery Mode — was introduced on the Spotify company blog under the deliberately vague headline “Amplifying Artist Input in Your Personalised Recommendations.” The feature allows artists to accept a 30% royalty reduction in exchange for algorithmic visibility through Discovery Mode, but with no disclosure to the public about their participation. As a result, Spotify has pivoted heavily to take advantage of its algorithmic music curation, prioritizing AI DJs and personalized playlists as the core appeal of the platform.
Spotify’s system disproportionately favors its own profits and those of major labels over independent musicians. Music advocacy groups have likened this model to the radio payola scandals of the 1950s, where disc jockeys accepted money from record companies to play certain songs and deceived listeners in the process. With no disclosure of this scheme, users are tricked into listening to songs boosted at the expense of artists’ profits, convinced it was chosen just for them.
The consequences of this model are most severe for independent musicians, who are pressured into Discovery Mode precisely because baseline streaming payouts — with Spotify keeping 30% of artist revenue — are already notoriously inadequate. In addition, to be included in the royalty pool calculation, tracks must have at least 1,000 streams in the past 12 months. Participation comes with disproportionate financial risk: Major music corporations like Warner Music Group can absorb the 30% royalty and afford traditional advertising, while indie artists have neither cushion nor capital. This setup forces indie artists to accept pay reductions just for a chance for exposure.
According to Slack messages from Spotify, Discovery Mode generated a gross profit of over $71.5 million between 2022 and 2023, with nearly all of that revenue coming from independent and DIY artists. Spotify’s Pre-Campaign Insights tool predicts streaming success with 85% accuracy for managed customers, further signaling that artist input is secondary to Spotify-predicted profitability.
In May 2021, the Artist Rights Alliance labeled Discovery Mode as “exploitative” and a “money grab,” warning that the tool could clear the field for major record labels and pop megastars to “swallow up even more of the streaming pie.” In June 2021, the U.S. House Judiciary Committee warned that it could create a “race to the bottom” at a time when musicians’ incomes were already devastated by the global pandemic. Even employees inside Spotify’s internal ethics-club Slack channel acknowledged that boosted plays “come at the cost of other artists,” and would benefit the corporation over anyone else.
However, Spotify continues to defend Discovery Mode as a fair and competitive tool. The company argues that transparency is sufficiently upheld through its Digital Services Act Transparency Report, which broadly explains commercial and algorithmic factors that may influence automated playlists. The app further rejects claims that Discovery Mode is anti-competitive, and pushed back by saying the Discover feature was both optional and would not affect flagship playlists like Discover Weekly.
Regardless of where Spotify puts the fine print on its anti-artist features, the implications of this practice are still unsettling. Spotify’s approach turns musical discovery into a predictive and transactional ecosystem, granting a single media platform enormous influence over cultural taste. For greater transparency, the Federal Trade Commission must investigate these pay-for-play dynamics — as they have with past radio scandals — to ensure that such anti-competitive practices don’t manage to take advantage of small artists.
However, the platform won’t change unless we pressure it to. Joining the ongoing boycott against Spotify is a great way to put pressure on the company to pay its artists, since the best way to hit a company is to strike at their wallet. True accountability on the company’s part would require transparent labeling of promoted tracks or exposure systems not contingent on royalty penalties. As listeners, we can skip pure algorithmic suggestions and instead seek out independent curators and platforms that showcase deserving indie talents. Spotify Wrapped season is fun, but we can’t let corporate attempts at curated virality override our moral compass.
WSN’s Opinion desk strives to publish ideas worth discussing. The views presented in the Opinion desk are solely the views of the writer.
Contact Suhani Bhatt at [email protected].