Analysis

Spotify set to crack down on ‘playola’ playlist payments


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We’ve been reporting for several months on the industry gossip about growing “playola” around streaming playlists: where external curators of popular Spotify playlists ask labels for money in return for adding their tracks to those playlists. Now Spotify is preparing to crack down on the practice, although how it enforces its new rules is another question entirely.

In a Billboard report on playola, Spotify’s global head of communications and public policy Jonathan Prince says that the streaming service’s new terms and conditions will debut this month, and will bar users from selling accounts and playlists as well as “accepting any ­compensation, financial or otherwise, to influence… the content included on an account or playlist”. A rule that seemingly extends to giving influential playlisters gig tickets or physical merchandise, as well as money.

Billboard suggests that playlist-pitching agencies like DigMark – now a partner of Universal Music after the label recruited its founder Jay Frank to run its global streaming marketing strategy – may be able to find loopholes in Spotify’s policy by paying playlisters for “consultancy” rather than for placing specific songs in their playlists. For now, it’ll be Spotify that’s responsible for drawing the line to cover or not cover this practice too, in the absence – for now – of guidelines from advertising authorities in its key markets.

Will those guidelines come? We suspect regulators are going to be monitoring the streaming music world – and playlists in particular – more carefully. There’s a clear parallel with the world of YouTube vloggers and product placement / sponsored videos, with several having had their knuckles rapped after not making it clear enough that there was a commercial relationship.

Just this week, the UK Advertising Standards Authority’s CAP team published new guidelines for vloggers: “When it comes to vloggers (or bloggers or anyone else creating editorial content) the assumption is that any mention of a brand is an independent decision of the vlogger as the ‘publisher’,” they explain. “That’s why, if there is a commercial relationship in place, it needs to be made clear.”

As things stand on Spotify, short of putting a note in the playlist description, there is no way for playlisters to make it “clear” that certain tracks’ inclusion has been paid for. It is no surprise, then, to see the streaming service taking action before regulators get involved. But as we said, policing the new policy could be challenging.

Stuart Dredge

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One response
  • Justin says:

    For me, so called ‘playlist payola’ is only a symptomatic problem of a deeper, root issue, namely, how can talented curators can monetise their efforts on Spotify.

    The fact is, it requires a significant amount of research, dedication and work to create and, more crucially, maintain good playlists and realistically, years to organically grow an audience to the kind of size that it would have any kind of impact.

    It’s a job in itself and one which music companies typically employ digital marketing managers, channel managers, etc. to do. Independent users who are successful at doing it deserve to be fairly rewarded for their efforts much like in any profession and right now, rightly or wrongly, they don’t have any other choice when it comes to monetisation.

    Plus, isn’t what’s called ‘playlist payola’ in the music industry press usually just understood as part of an influencer outreach strategy in most other online marketing sectors? Big influencers on not just Youtube but Instagram, Vine, or any social platform you care to mention will command huge fees for endorsing products. Parking the transparency & moral issues for one moment, how is this any different?

    Speaking more broadly, valuations of most online businesses are often predicated on the size of their audience and the ownership of & access to it. In the same way, there is an intrinsic value to the number of followers on a playlist, so is it any wonder some of these users are selling up to bigger companies keen to take a shortcut into the playlisting space?

    I also do find a crack down on the buying and selling of accounts itself colossally hypocritical coming from Spotify given that they themselves were among the first and most prominent to do it, notably when they acquired the playlist company Tunigo & its Spotify profiles and playlists for an undisclosed fee only 2 short years ago! That service has subsequently evolved into the ‘Browse’ section on the Spotify homepage….

    Putting a block on such activity also basically prevents the next Tunigo or similar service from happening as any potential investors in such ventures are no longer guaranteed even a safe exit strategy.

    Spotify, rather than hard lining users on the issue, needs to come up with a revenue model that works for influential users so that they don’t NEED to take payments from labels or other parties.

    If nothing is in place to enable this, then independent curators will abandon the platform in favour of others were their efforts can be rewarded and all that will be left will be Spotify’s own playlists (which already absolutely dominate) plus a handful backed by major labels and other companies with deep enough pockets to promote them

    YouTube, by contrast, is a great example of a platform which empowers influential users to monetise. Big promo channels like Majestic Casual, The Sound You Need & Mr. Suicide Sheep, etc have between 2-3 million subscribers and are proving arguably the most influential brands in breaking new artists. These accounts upload new videos (which they monetise) in many cases several times a week and actively encourage track submissions and it doesn’t seem to spark anything like the same controversy there.

    It’s also telling how none of those brands are anything like as active on Spotify, which is by far the platform with the best plays to users ratio. Content availability issues aside (another debate!) It’s clearly an afterthought for them given the frequency with which their playlists are updated (if they even have them) precisely because it takes loads of extra work to do and they don’t get paid for it…

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