Spotify today announced a plan to allow artists and labels to promote songs by giving them preferential treatment on Spotify's autoplay playlists and algorithm-created radio sessions. The catch is that in exchange for this song-specific promotional boost, artists and labels would pay for it by receiving a lower royalty rate on those streams.
For example, if the artist or label selects "Song X" to promote, Spotify's algorithm would give greater weight to that consideration when generating a radio session or autoplay playlist.
Spotify says it currently drives 16 billion artist discoveries every month, "meaning 16 billion times a month, fans listen to an artist they have never heard before on Spotify. We’re proud of that and are actively refining our algorithms to enable even more fan discoveries of new artists each month," the company says. It adds, "We’re able to make great personalized recommendations because of complex, dynamic systems that consider a wide variety of 'inputs' about what you like—which we refer to as 'signals' —and balance those signals in many possible different pathways to produce an 'output': the perfect song for the moment, just for you."
Here is how Spotify explains the new promo option:
"In this new experiment, artists and labels can identify music that’s a priority for them, and our system will add that signal to the algorithm that determines personalized listening sessions. This allows our algorithms to account for what’s important to the artist—perhaps a song they’re particularly excited about, an album anniversary they’re celebrating, a viral cultural moment they’re experiencing, or other factors they care about.
"To ensure the tool is accessible to artists at any stage of their careers, it won’t require any upfront budget. Instead, labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service. 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, and we only ever recommend music we think listeners will want to hear."
Many independent artists, however, are viewing this as another way for reduce their royalties while giving an edge to labels and bigger artists.