Spotify Introduces a Brand New Feature: Payola

Spotify Introduces a Brand New Feature: Payola

To better match individual songs with listeners’ preferences, Spotify will add a “Sponsored Songs” feature to its free tier.  But is that just streaming payola?

To better monetize their free tier, Spotify is testing their new ‘Sponsored Songs’ feature.  The move will allow brands to put their ads in popular playlists, which sounds fine.  But it’ll also allow labels to promote individual songs, a move that introduces some tricky payola issues.

The Swedish streaming platform confirmed to the BBC that they’re currently testing the ‘Sponsored Songs’ feature.  According to the streamer, music labels can add individual songs to users’ playlists as sponsored content.  Spotify will match the songs to listeners’ music tastes.  And to avoid conflict with paid users, they’ll only add this feature to its ‘freemium’ tier.

Technically, Sponsored Songs doesn’t violate federal law.  Under a 1960 federal statute, record labels can’t offer terrestrial radio stations a financial incentive to play their songs.  Offenders can receive a fine up to $10,000 per offense and up to one year in prison.  Spotify, however, doesn’t count as a radio station.

The streaming platform didn’t specify how much money they receive from labels or how much they charge for sponsored content.

It may also be confusing to users.  Through the Sponsored Songs feature, Spotify integrates label-paid songs into playlists listeners follow.  These songs then appear above the playlist.  Users can also save these songs for later listening.

And the rules are fuzzy.  User Liam Maloney first discovered the Sponsored Songs feature while streaming from his favorite playlist.  Although the company said that it’s currently testing out the feature only in the freemium tier, paid users have discovered sponsored content in their playlists.

Posting a screenshot, Liam Maloney called out company executives.

 

For some users, the company has also auto-enabled the Sponsored Songs feature.

User Chris Messina found that listeners will have to manually turn off this feature.

 

Ahead of its IPO, the move may help Spotify earn money from its free music streaming tier, which makes up more than half of its currently listener base.  The company has surpassed 140 million monthly active users and has at least 50 million paid subscribers.

It has yet to make a profit, however.  According to its latest financial reporting, the company lost over $600 million last year.

Image originally posted by Liam Maloney on Twitter

11 Responses

  1. Avatar
    FuckuPaul

    DMN logic : Let’s talk shit about Spotify if they don’t monetize enough the free tier, let’s talk shit about Spotify when they try to monetize the free tier.

    • Avatar
      STOP TROLLING

      If you haven’t noticed, paul didn’t write this article. Bad troll, I rate it 1/10

      • Avatar
        duh

        He’s the editor, ignorant asshat. He decides what’s published and can direct the tone of the article to be changed if he wants.

  2. Avatar
    LEAVE PAUL RESKINOFF ALONE

    wOW NOw that’s fucking amazing!!!!!!! Good fucking thing for musicians who have GREAT music, but struggle on the marketing side.

  3. Avatar
    STOP TROLLING

    wait, so this is labels only? Can’t an independent artist releasing through a distributor get a sponsored song? Maybe feature.fm will have this? I WANT MY SONG SPONSORED. I used feature.fm for 8 tracks and it works, if you have good music. The problem with feature.fm is that it’s too expensive. So ran a 20$ campaign, got 10$ downloads from it, good, but still a loss.

    • Avatar
      Adam

      Maybe they’ll roll it out to all artists. I suspect it’ll cost more than $20 though…

    • Avatar
      Anonymous

      its still artist discorvery and exposure, you will.make it back in the lomg run if the price is right

  4. Avatar
    Will Buckley

    After out right piracy, Spotify has been the biggest contributor to the collapse of the music business.

    • Avatar
      duh

      Get your head out of your ass. Streaming has saved the industry.

  5. Avatar
    partyfavorz

    You don’t know the first thing about payola. Paid sponsorship is what iTunes and many other reputable podcasting sites do ALL THE TIME. It’s been around forever. It’s only worth the artists/label’s time if what they’re promoting is worthwhile otherwise folks will just move on instead of actually engaging.

    It’s also available to every artist, independent label or basically anyone who wants to promote their work to a larger audience; not just the major labels.

    If you need a better understanding of what payola actually is start here:

    https://en.wikipedia.org/wiki/Payola

    The writing on this site is so fucking juvenile and uninformed it boggles the mind. I never even signed up for DMN. It just started showing up in my inbox one day and I peruse it occasionally. Mostly, the shit you write here is laughable. High school newspapers are better written than this crap.

    • Avatar
      duh

      I’m glad to see that there’s at least one commenter here who’s not an ignorant fucknut.