Spotify have revealed they are experimenting with allowing recording labels to promote their music by inserting songs into to user playlists, basically as “sponsored content”, the BBC reports. The Facebook-like marketing trial will only affect free users.
Spotify is experimenting with inserting “sponsored songs” from record labels into the followed playlists of free users.
As the Fader note, the “sponsored songs” won’t be explicitly displayed as such, differing from other forms of advertising on the site. Instead, they’ll be targeted to users whose listening habits match with the advertised track and inserted into relevant playlists.
Despite free users of Spotify experiencing far less functionality with the platform, they can opt out of the trial in their settings (check out how to do so, via the The Verge).
“We are always testing new promotional tools that deliver the highest relevancy to our users,” Spotify said in a statement shared by the BBC.
The trial is presumedly a part of Spotify’s various experiments to mitigate revenue loss. Recently it was revealed that Spotify was considering making some upcoming releases avaliable only to paid subscribers. It was also recently revealed that while it had revenues of more than 2.9 billion euros in 2016, it reported a net loss of 539.2 million.
“This is not the silver bullet but instead part of what will be a multi-faceted answer to Spotify’s margin woes,” said Mark Mulligan, managing director of Midia research.
“In a broader context, this may presage a wider strategy similar to that of Facebook’s, whereby it effectively starts charging artists and labels for access to fans.”