Spotify Introduces a Brand New Feature: Payola

To better match individual songs with listeners’ preferences, Spotify will add a “Sponsored Songs” feature to its free tier. But is that just streaming payola?

To better monetize their free tier, Spotify is testing their new ‘Sponsored Songs’ feature. The move will allow brands to put their ads in popular playlists, which sounds fine. But it’ll also allow labels to promote individual songs, a move that introduces some tricky payola issues.

The Swedish streaming platform confirmed to the BBC that they’re currently testing the ‘Sponsored Songs’ feature. According to the streamer, music labels can add individual songs to users’ playlists as sponsored content. Spotify will match the songs to listeners’ music tastes. And to avoid conflict with paid users, they’ll only add this feature to its ‘freemium’ tier.

Technically, Sponsored Songs doesn’t violate federal law. Under a 1960 federal statute, record labels can’t offer terrestrial radio stations a financial incentive to play their songs. Offenders can receive a fine up to $10,000 per offense and up to one year in prison. Spotify, however, doesn’t count as a radio station.

The streaming platform didn’t specify how much money they receive from labels or how much they charge for sponsored content.

It may also be confusing to users. Through the Sponsored Songs feature, Spotify integrates label-paid songs into playlists listeners follow. These songs then appear above the playlist. Users can also save these songs for later listening....more