Spotify announced Nov. 2 that artists will soon be able to promote their music to more users if they agree to take a pay cut on the platform.
Currently, Spotify uses a complex algorithm that creates personalized recommendations for users based on listening habits, including genre preference and song length. The new feature, which will begin a test run in the coming weeks, would allow artists to influence the algorithm by requesting certain songs to be prioritized.
“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,” the press release said.
But in return for the promotional help, Spotify will pay artists at a lower rate for any streams in personalized listening sessions that involve the new service. The streaming company marketed the new feature as a tool for up and coming artists who may need an extra boost at the beginning of their careers.
Although Spotify does not disclose how much it pays artists per stream, analysts calculate it at about $0.00318 or $3.18 per 1,000 streams. With these low payouts, artists make the bulk of their revenue from touring, which is no longer possible under coronavirus restrictions. In 2014, Taylor Swift pulled all her music from the platform after publicly criticizing the company for allowing users to listen to music in the ad-funded free tier, declaring that art should be paid for. But by 2017, Swift returned her music to Spotify and now earns around $6 million a year from the service.
Music industry Professor Michael Kaminsky is unsure if the new program will be useful for new artists.
“It’s going to depend on so many factors. It’s going to depend on how many people take advantage of the program, because if everyone takes advantage of the program, then essentially nothing changes except Spotify pays out less,” Kaminsky said. “If the program truly does what Spotify thinks it will do, which is bring a lot more plays to an artist...I could see that being a very compelling argument for a lot of people.”
Kaminsky also explained that the history of artists accepting losses for promotional expenses is nothing new.
“For years and years and years, if you walked into a store and right when you walked in, there was a big rack of records suggesting that you purchase a certain artist, that was all paid for. That was not a store generously promoting an artist on behalf of the artist,” Kaminsky said. “This is not anything new within the music industry.”
Olivia Wendland, a sophomore music industry major, believes that the new feature will be popular for burgeoning artists.
“The goal in the music industry is to get your name out there and then from there you can build up,” Wendland said.
Wendland is concerned that a starting artist who chooses to boost their song using the promotion could end up making less in the long run if their music becomes very popular with a lower revenue return.
Wendland also said that the financial risk of the new feature, which could end in lower returns if the plays don’t increase after a promotional boost, is similar to the struggle artists face when signing record deals.
“Everyone knows that a record deal is going to screw you over,” Wendland said. “They’re going to barely pay you; you’re going to be in debt to them, but you do it to be able to get the popularity, so this is like an alternative to that.”
Sophie Barber, a junior music industry major, said that many new artists may risk a loss in revenue for the opportunity to expand their audience.
“It will probably help with exposure for up and coming artists who are, you know, trying every technique to get noticed and who aren’t necessarily making large amounts of money from streaming revenue in the first place. So the cut to their streaming revenue wouldn’t make a huge impact on their overall income.”
However, this model requires artists to be willing or able to make less money at the start.
“One of the best things about streaming, theoretically, is how it breaks down a lot of the huge barriers to entry, financially and otherwise,” Barber said. “But this new option on Spotify seems like maybe the beginning of building those walls back up and a fall towards a more pay to play model.”
Rudy Touzet began releasing music on Soundcloud a few years ago, but decided to switch to Spotify to widen his audience. Touzet is encouraged by the new feature and considers using it to promote his music in the future.
“It’s really nice to see Spotify wanting to help an artist out, especially up and coming ones,” Touzet said. “The reason why people are making music is so their voice is heard.”
But Kaminsky said Spotify is most concerned with keeping people engaged on their platform, so if the feature agitates users, it may not be fully integrated into the service.
“The important thing to keep in mind here is at the end of the day, Spotify is in the business of brand recognition” Kaminsky said. “So, to them, it’s going to be less important about which artists they’re helping to break. It’s going to be more important to say that any time a user opens our app, they have a really great experience.”