‘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.