Recently, a new option appeared in Spotify’s settings menu: a toggle to turn a feature called ‘sponsored song’ on or off.
As we reported at the time, when we asked Spotify what this meant, the company said ‘we are always testing new ways of putting the right music in front of the right audiences. But we don’t have any more information to share right now’.
One week later, Spotify now does have some information to share on how sponsored songs will work within its free tier: “a product test for labels to promote singles on the free tier”.
“Instead of appearing as obvious ad banners like Spotify’s existing ads, labels can pay to have Sponsored Songs appear on playlists you follow or potentially elsewhere on the service,” reported TechCrunch, after being briefed on the new feature.
“These can be targeted to appear to users with matching listening tastes so they fit alongside their other music. And these Sponsored Songs will be instantly playable and saveable instead of requiring an initial ad click first.”
There is no information on how much Spotify is charging for these sponsored slots, although judging by the company’s comments it remains a test rather than an official feature rolling out to all its free users. The existence of the settings toggle suggests premium users will be able to turn sponsored songs off, which is sensible – as is the fact that they appear above a playlist, rather than being inserted into it (not least for regulatory ad-disclosure reasons).
If sponsored songs rolls out globally, it’ll add more fuel to the perennial streaming-vs-radio debates – this feature will certainly compete with commercial radio stations for advertising spend, with Spotify able to brandish its active-user reach in individual countries as a comparison to terrestrial stations.
One point where we disagree with TechCrunch’s interpretation of the new move, however: “Sponsored Songs hearken back to the dark days of radio payola, where labels paid DJs at radio stations to put their artists’ songs on the air,” it suggested.
We don’t agree. A label paying a playlist curator to insert a track into their playlist without disclosing that payment to listeners is the streaming equivalent of payola. A clearly-marked sponsored track that sits outside the playlist itself – as appears to be the case with sponsored songs on Spotify – is an advertisement.