Payola? Spotify Calls Justin Bieber’s Latest Single a ‘Viral Hit’

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‘Payola’ first started decades ago, when major recording labels were found paying major radio stations large sums of money to play their songs.  In this decade, the same thing appears to be happening online.

In May of this year, a leaked contract between Spotify and Sony Music revealed a number of preferential financial arrangements, including lump sum payments, ownership shares, and reserved allocations of advertising inventory.

Last month, Billboard exposed a new type of ‘digital payola,’ with major labels paying for premium Spotify playlist positions.  Just like the old days, labels like Universal Music Group are now operating through slippery front groups like DigMark, headed by Jay Frank, according to the report.

“According to a source, the price can range from $2,000 for a playlist with tens of thousands of fans to $10,000 for the more well-followed playlists,” Billboard reported, with ‘Viral Hits’ one of the biggest and juiciest playlists available.

“You get a song on [Viral Hits] and you’re instantly relevant — for a week at least,” said Daniel Kruchkow of Crush Management.

Spotify head of communications Jonathan Prince responded by saying his company’s updated policies prevent accepting any payment for playlist placement.  Though, he didn’t specifically say whether those policies were being adhered to.

24 Responses

  1. Jeff Robinson

    When Spotify was new I looked in to buying ‘ad-time’ for a commercial on Spotify for music. This wasn’t for any ‘chart’ appearance, but rather for commercials advertising a new release. Their fee at that time was $5000 per month.

    I would suspect if they were now offering ‘quid-pro-quo’ chart appearances, then that fee would be substantially higher.

    In radio, it was typically $2500 per station to get added to a playlist. :30 and :60 second commercials could be $150 or more in a Top 100 market. Likely, both those numbers still apply, but it’s been many years since we dealt with that crap and even then, we never paid a dime to commercial radio for airplay and thus never received any.

    Radio used to be important. I would think placing songs on Spotify-created playlists for users of Spotify would certainly have more direct effect now. Not surprising they would be charging for it.

  2. Vail, CO

    Spotify isn’t in the music business, Spotify is in the major label business. They are controlled by the major labels and live and die by the major labels, never forget that.

  3. dry roasted

    But Bieber cried on the VMAs. I feel a connection with him.

  4. Adam

    Paul – I’m a bit slow so perhaps you could explain what the proof is?

    I see an ad. And I see a viral list.

    Does the fact that a song had ads disqualify it from ever being a viral hit?

    • Curtis Jenkins

      Now I want to you take the number 2.

      Now add that to another number 2.

      What do you get?

      • Secret Agent Man

        Who are you? “The new number two.” Who is number 1? “You are number 6.” I am not a number! I am a free man!!

      • Secret Agent Man

        Who are you?

        “The new number two.”

        Who is number 1?

        “You are number 6.”

        I am not a number! I am a free man!!

  5. PeteZahut

    this is not proof, its relevant ad targeting. The ad algorithm picked up that Justin Bieber’s name was in the playlist so it served an ad about him. Its like the same way you search to buy something on amazon and see an ad for it later on facebook. Hey DMN we know you hate spotify and you are heavily biased against it but this is really horrible. You guys are not even real journalists anymore.

    • I'm a Philosopher

      Please. Relevant ad targeting? Try special deal in exchange for licensing along with a BIG payment that will never go to their artists.

      • PeteZahut

        I’m trying to follow your logic. Spotify pays UMG to put the their ads on the service? Well we do know that spotify gives free ad space to labels sure, but that would still mean this is “targeting” advertising. How much money if any UMG shares with its artists is irrelevant to this article, and my comment. The bottom line (pun intended) is that this is NOT a case of payola. UMG did not pay spotify to put JB on their playlists especially when Spotify is going after individuals (or organizations) who manage popular playlists but participate in payola. Why would Spotify condemn payola and then turn around and participate in it? see it don’t make sense

  6. Nina Ulloa

    i don’t think there’s any evidence of official spotify playlists having pay for play. just really popular spotify playlists created by 3rd parties.

  7. Name2

    Calm down, people, It’s not like a “news” outlet published articles written by its advertisers.


  8. Remi Swierczek

    Live income of music industry is four times bigger than sells or streaming revenues. Therefore it is the highest priority to maintain and create mega star mega tour cash machines.

    I would be very interested to see how management agreements between those mega stars and the labels evolved in those changing times.

  9. Manny Sheehan

    So how many independent artists get to do “in stores” at Spotify? How is this different that MERLIN paying Pandora for playing their artists?

  10. Literati X

    I’m trying to get my vocalist campaign on amp and rise like a viral–plague to the top of the playlists I I don’t give a damn what type of business you’re in : ‘ I’m in the shake your corporate–body down to the ground business . ‘ You got my goddamn money this morning , motherfuckers , so I can be on my way and stop subjecting these fine folks on ‘ Digital Music News ‘ to my , Invisible X , spoken word poetic tragedies. . .

  11. RockNRollBuddha

    If you’re an indie these days, you’re getting the short end of the stick on ALL the streaming services now, not just Spotfiy.

    All the major services have been co-opted by the majors – getting an indie artist music on a Curated playlist of any size, especially at Spotify – is becoming increasingly difficult, no matter how they spin it or say they are “artist friendly”.

    Same shit, different day. It sucks, but that’s the reality of this business.

    • Anonymous

      That’s why great music that gets word of mouth is the best way to get anything heard. Put it on the old indie radio. I mean, 500k plays on Spotify pays as much as 25 sales anyway, right?

  12. Conservative Mark

    If you think payola doesn’t exist in the music industry you are seriously delusional. Otherwise, why else would I be hearing Carrie Underwood singing about spinning on “a thin black sheet of glass” in August and be “making waves and catching rays” on a Pontoon with Little Big Town in December?!?!?

  13. Name2

    And said Bieber song is #1 at Apple, per the front page today of DMN.

    So, this means…. er, what, exactly?

    • dcguzman

      It means DMN are liars and con men to get clicks with there ad revenue. Theyre hypocrites. Saying songs are a rare and important art, and yet I’ve seen too many ads in this website every time I disable my ad block. These articles are important too, they should make this website a paid subscription service. Oh wait they wont ever do that.

  14. Roger Bixley

    Wikipedia: Payola, in the music industry, is the illegal practice of payment or other inducement by record companies for the ___broadcast of recordings on commercial radio___ in which the song is presented as being part of the normal day’s broadcast. Under U.S. law, 47 U.S.C. § 317, a ___radio station___ can play a specific song in exchange for money, but this must be disclosed on the air as being sponsored airtime, and that play of the song should not be counted as a “regular airplay”.

    To quote Indigo Montoya, “You keep using that word. I do not think it means what you think it means”.