A news from Spotify has surfaced: the Swedish company announced an upcoming “sponsored” service. In brief, it seems that artist (or recording labels alike) could decide to promote a specific song to a targeted demographic, in exchange for a percentage cut on their royalties. The algorithm will do the rest, trying to “fit” the song in various recommendations and auto-play services offered by the popular application.
As a person who detested TV ads growing up, I do not commend overt marketing techniques which could influence the genuine experience while listening to random new songs on the platform. And the feeling that Spotify is “hiding” sponsored tracks in my recommendations is even more annoying and intrusive. The lack of transparency is disappointing even more than ads, as one should have ability to recognize commercials (and skip it). Especially when someone is paying a subscription!
But, there are a couple of interesting details about the “algorithmic” sponsorship, on whether this could be the new norm in future. The caveats are gaping huge: advertisements are manipulative, and tiring. Secondly, Spotify can easily select effective target crowd for these campaign, and it likely could turn out as a successful strategy. Concluding, the payout is the royalty after split: theoretically, if a minor name with say 10,000 monthly listeners has access to same offers… and that’s where the potential problems could arise.
Two possible fallouts can come out: first, the system works equally well for everybody. The bigger brands will spend millions on this new kind of advertisement, ultimately clogging the chain and obscuring the smaller and hardworking artists who cannot afford this luxury, or perhaps giving away a significant part of their revenue. This could wage a price war, and I can already vision higher rates of weekly releases from some acts, exploiting this “boost”. Second, all of this could flop, if the mechanism fails to impact, hence getting abandoned by artists altogether.
That is unlikely to happen, but I am curious to see how the leading corporation handles this situation, considering the backlash they received.