Last week Spotify announced it will start testing a new service letting artists promote their music within Spotify’s algorithmic discovery platform. The company says at launch, the service will allow artists and labels to identify music that’s a priority to them, and Spotify will then add a signal to help the music get surfaced by its personalization algorithms.
It’s not clear if this advertising will be labeled. And it is advertising, as artists will pay by accepting a lower royalty fee, Spotify is calling a “promotional recording royalty rate”.
Tech Crunch says this service will require no upfront budget from artists’ or labels’ and that royalty rates from Streams coming from any other place in the app will not be impacted.
In its public announcement, Spotify notes, “we only ever recommend music we think listeners will want to hear,” Still these promotions are clearly a form of pay-per-click advertising. And these promotions are analogous to Google or YouTube, promoting search results that provide affiliate commissions, without disclosure.
While the affiliate industry is rampant with undisclosed affiliate marketing, payola laws in music are strict, and many people, both elected and in the general public, are concerned with big tech firms having too much power.
Working, I suppose in favor of Spotify’s antitrust defense, is the fact that just because an artist joins the new program doesn’t mean they’re guaranteed plays. Spotify says: “If the songs resonate with listeners, we’ll keep trying them in similar sessions. If the songs don’t perform well, they’ll quickly be pulled back. Listener satisfaction is our priority—we won’t guarantee placement to labels or artists[…]”