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Spotify to let labels pay for sponsored recommendations; what it could mean

In a potentially significant move, Spotify will start allowing music labels add sponsored listings to personalised music recommendations, the company announced on Monday. "Artists and labels can identify music that’s a priority for them, and our system will add that signal to the algorithm that determines personalized listening sessions," the company said, adding that only users who are using features on Spotify to discover new music will hear such sponsored music. This announcement could have significant repercussions for artists' "discoverability", as most popular music is released by three large labels, Universal, Warner and Sony, who may be able to outspend independent artists and independent labels. In India, there is the added concern that the music industry is dominated by film soundtracks, which is also concentrated in the hands of a small number of labels. We have reached out to Spotify for comment on whether this experiment — for now, that's what this is — will be rolled out for listeners in India. Want both artists and labels to reach listeners: Spotify However potentially tectonic this change could be, Spotify is careful about how it frames these sponsored songs. "To ensure the tool is accessible to artists at any stage of their careers, it won’t require any upfront budget. Instead, labels or rights holders agree to be paid a promotional recording royalty rate for streams in personalized listening sessions where we provided this service," the company said. The company added that these tracks will be targeted, and if they don't resonate…

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I cover the digital content ecosystem and telecom for MediaNama.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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