Tech

Spotify will promote artists' songs to more users if they agree to lower royalty payments

Taylor Swift
After releasing "Folklore," Taylor Swift became the most streamed artist on Spotify on any day this year Roy Rochlin/FilmMagic
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Artists will soon be able to promote their music to more users on Spotify – provided they take a pay cut on the platform, the streaming giant announced Monday.

Spotify currently recommends new music to listeners using personalized algorithms that are based on the artists a user listens to, the time of day, and the release dates of songs. This accounts for around 16 billion listens a month, Spotify says.

As part of a trial that starts "soon," artists or labels can make specific tracks show up more often in these recommendations, in exchange for lower royalty payments, Spotify said.

In not asking for an upfront payment, Spotify said it was ensuring the service was open to smaller artists.

Artists will be paid less for songs users surface in this way. When asked by The Verge, Spotify declined to say how much lower this "promotional recording royalty rate" was, but added that "the idea is for artist teams to be able to earn a positive ROI by using the tool." 

Read more: A Spotify exec describes how the company is trying to reshape podcasting now that it has a robust group of creators and listeners on its platform

The company said in its press release that its users were its priority, and that artists couldn't use the promotions to override the recommendation system.

"We won't guarantee placement to labels or artists, and we only ever recommend music we think listeners will want to hear," it said.

The test will only apply to Spotify Radio and Autoplay formats, which is where listeners want to discover new music, it said. It would later expand it other personalized areas of its platform, it added.

People have increasingly turned to Spotify and other streaming services during the pandemic as they look for ways to stay entertained at home. Spotify's number of monthly active users grew 29% year-on-year to 320 million in the quarter to September.

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Grace Dean was a business reporter at Business Insider's London office between August 2020 and August 2024.Her work focused on the restaurant industry, fast-food giants, retail trends, and the labor market. She also wrote about Google's work culture, gender equality in Iceland, layoffs at Calibrate, and truck drivers' experiences on the road.Prior to joining Business Insider, Grace studied German & Business at Newcastle University and spent a year as the Editor-in-Chief of its student newspaper the Courier.Here are some examples of her coverage:Women in Iceland want you to know it's not a gender equality utopiaFast food feels more expensive than ever before. Here's why.Calibrate's CEO announced layoffs affecting over 150 staff on a Zoom call. Minutes later, their company laptops were wiped.Starbucks workers say customers got ruder during the pandemicBritain's charity stores are going upmarketThe no-frills tactics that help make Aldi so cheapPrivate cleaning companies are turning down business because of staff shortages