Spotify to allow brands to sponsor Discover Weekly playlists

Ever since its launch in 2008, Spotify has dominated the streaming market around the world. Its creation sparked a revolution in the music industry, changing the way artists build revenue through their work. The creation of the platform was the start of a huge shift from sales to streams, a shift that is still taking place to this day and continues to impact the industry. Now competing with fellow industry giant Apple Music, Spotify continues to enhance its offering, developing its technology in order to retain its leading position. The latest development will see artists given more advertising opportunities on the platform. In this article, we’ll look at the policy development and how this will affect artists.

With over 200 million users, it’s not surprising that Spotify has such a strong hold on the music industry. It is important to note, however, that just 87 million of these users are paying for premium, leaving 113 million who are operating through a free account and are subject to advertisements. It is these users in particular who are integral to the change in policy, which will see artists given more opportunity to advertise to listeners. Only non-paying users will be affected, as premium membership is sold to users on the basis of eliminating any form of advertising from the platform.

The change in policy effects the incredibly popular Discover Weekly playlist, which appears every Monday and uses user data to put together recommendations. It offers each user a bespoke selection of tracks that have been chosen based on Spotify’s recommendation algorithms. It gives users the chance to discover new artists, and in-turn gives artists the chance to be discovered by potential fans. This particular playlist was introduced in 2015 and is available to every user, premium and non-premium. The difference for non-paying users of Spotify is that the playlist includes ads from artists and brands.

Originally, adverts were featured between songs to create breaks, but each advert was its own separate entity. Now, Spotify is giving brands and artists the opportunity to sponsor the entire playlist and control every single one of the ad breaks during the playlist. For example, a brand could advertise a new product in several separate breaks. The result of this is that Spotify becomes a much greater advertising opportunity for brands, giving them the opportunity to build a much stronger connection with the listener.

According to Spotify’s head of industry tech, Casey Weinreich, the change was made in collaboration with a tech partner:

“When people think of Spotify, they think about music — all of the world’s songs, albums and their favourite playlists right at their fingertips. At the same time, Spotify is a technology company. The magic with this partnership is we were able to identify a tech partner with a shared ambition to utilize technology, in this case, machine learning, to enrich our user experience.”

The new policy will soon give brands the opportunity to advertise through Spotify like never before. This is a huge positive for everyone involved, providing advertising and revenue opportunities for various parties. As Spotify gains more revenue from advertising, they will, in turn, be able to work on further strategies to fine-tune the streaming service for its global subscriber audience.

The increased opportunity for ad revenue could also cause a chain reaction resulting in a higher volume of streaming revenue for artists. Ultimately, the revenue earned by artists originates from revenue earned by Spotify from advertising and membership payments. For this reason, increased revenue for Spotify is also good news for the artists who rely on streaming revenue for an income.

For many artists and labels, this change in policy may also present a great opportunity to advertise through Spotify. Many artists neglect to use Spotify to advertise their music. What better place to advertise your music than the site through which you receive revenue from streams? By advertising on Spotify, you cut down the consumer’s journey to your content. For example, if you advertise on Facebook, the user may have to click on your profile and scroll down your feed before finding a link to your content on streaming platforms. For many users, this is too much effort. If you advertise on Spotify, users simply have to click on the ad in order to reach your content, making the transition completely effortless.

The new advertising policy also provides a great opportunity for labels to reach a bigger audience. During the advertising breaks, labels have the opportunity to share their latest releases and in turn, generate more streams and more fans. By advertising to listeners who are already using the platform, it is much easier to persuade them to check out your label and listen to your tracks.

As Spotify continues to develop its offering for advertisers, all parties are set to benefit, from brands to artists. With every development in technology, the music industry benefits in the long run. Plus, the more Spotify can gain from advertising partnerships, the more valuable and financially stable it will be as an entity. The music industry largely rests on a few major brands which form the foundation. In order for the industry to remain stable and grow in monetary value, it is important that these brands continue to flourish way into the future. Despite its controversial moments centring around redistribution of revenue, Spotify remains one of the leading brands in the industry and looks to remain for years to come.