Spotify to offer Promotion to Artists and Labels for “No Upfront Cost”

Recently, Spotify announced a new strategy, offering to promote artists and labels through their algorithm into user’s recommendations in exchange for a “lowered promotional recording royalty rate.” This is spiking many opposing views and opinions on whether this yields a negative or positive change. For artists already struggling to make a profit off their music, this raises concerns. Although, this too can be seen as a useful tool as it opens up the doors to creators of all levels to push their visibility through radio and autoplay functions. 

The catch really is branding this as “no upfront cost.” When in reality, the small portion of revenue that exists to be made is now being sacrificed in exchange for this. The lengthy press release from Spotify also reads “Labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service.”  It also states that going through with this “won’t guarantee placement to labels or artists” which begs the question is this really worth it, or is this just another ploy for Spotify to make a quick buck?

Just last week 4,000 independent artists, all members of The Union of Musicians and Allied Workers proposed a new campaign. In this campaign, they demanded that Spotify should be paying them at least 1 cent a stream. In reality, Spotify would be nothing without these artists and creators, yet they continue to be underpaid and exploited by the company due to the inequitable streaming environment. 

What does this mean for playlisting? Although this has yet to be discussed, it will be interesting to see if this has an effect on artists utilizing playlisting. In the perfect world, maybe this would drive creators to turn more to independent companies such as PlaylistStreams who utilize organic methods of driving streams. The answer to this question will remain unanswered until Spotify’s new strategy rolls out further.