The recommended playlists on Spotify are not only made for users to discover new music, but they also carry the marketing objectives of the streaming platform and its partner record labels. This section will discuss the market structure of Spotify, the marketing goals in its playlists other than giving users what they like, and, from an artist’s point of view, how their music is distributed through Spotify.
To begin with, Spotify has a large partnership with the major record labels in the US. During the interview with Dr. Turnbull from the Ithaca College, he briefly talked about the history of Spotify: born in Sweden, Spotify gained popularity in Europe and started to expand worldwide. “They eventually had to cross the Atlantic to come into the US market.” Says Dr. Turnbull. “In order to do that, they had to have all these licensing rights. So, they gave up a good portion of their company to the different major record labels.” In Spotify’s 2020 financial statement, the company reported that the music licensed to Spotify by the three major record companies (UMC, Sony, Warner), and Merlin makes up the majority of music consumed on Spotify, which “accounted for approximately 78% of music streams”. It also admitted that their business decisions are likely to be affected by their rights holders.
(Gutierrez 2020, 16)
While a strong relationship with the majors is always considered in Spotify’s operation, these record labels also own companies like Topsify, Digster, and Filtr, which are big playlist services on Spotify that have large followers and hundreds of playlists (Pelly 2017). Under this market structure, major labels have big advertising opportunities for their artists and music. “Most don’t just play only their exclusively their own music,” according to Dr. Turnbull, “but they play mostly their own music, so it’s sort of like they control”.
Screenshot of my Spotify: Topsify HITS 2022 playlist
Artists featured in the top ten songs ticked in red all belong to Warner Music Group, which is the parent company of Topsify. The description of the playlist is today’s top chart hits around the world. However, Topsify almost exclusively chose to put on artists owned by Warner Music Group. This example shows that playlists made by labels are usually biased regardless of their title or genre. Artists who are backed by these large record labels will also have larger opportunities to get exposed or recommended to users.