Source: Max J. Pachali, Hannes Datta (2024) What Drives Demand for Playlists on Spotify?. Marketing Science 0(0). https://doi.org/10.1287/mksc.2022.0273
In the rapidly changing world of music streaming, playlists have become crucial battlegrounds for everyone in the business—artists, labels, and the platforms themselves. A mind-opening study published in Marketing Science reveals some interesting insights into what drives demand for playlists on Spotify. And those insights could very well change how we think about music discovery and promotion in the digital age.
The Research: Figuring out What Makes Playlists Popular
Researchers Max J. Pachali and Hannes Datta (Tilburg University) sought to understand what makes some Spotify playlists successful and others not. Their work included over 30,000 popular playlists in 66 categories. They were comparing two different ways of making playlists more popular:
Being featured on Spotify's Search Page
Adding songs by exceptionally popular major label artists to playlists
The findings are nothing short of revolutionary for the music industry.
Key Discoveries: The Platform's Power Play
The Study Found That Being Featured Is HUGE.
The study revealed that being featured on Spotify's Search Page increased the number of new followers for a given playlist by an average of 0.95%. If you have a playlist like "Reggaeton Classic" (1.9 million followers), being featured on the search page might mean that you gain 18,050 followers in a single day.
The Superstar Effect
Superstars Are Still Important. But Not as Important as Being Featured on the Search Page. Adding tracks from major-label artists increased the average number of new followers by 0.45% daily. While still meaningful, it's less than half the effect of being featured on Spotify’s Search Page.
Implications for the Music Industry
1. Platform Power
Spotify's ability to guide the user toward some content over other content has some far-reaching implications for the industry. Concerns about the platform's power should be front-and-center when we consider the dynamics of music discovery.
2. The Value of Superstars (Diminished?)
Superstar artists are still valuable assets for major labels—but are they as valuable as they were before Spotify? Superstars still help attract listeners to playlists, but the platform’s power to give or not give you a "feature" spot has more influence.
3. The Balance of Power Is Changing
Spotify has more power than the labels when it comes to making playlists popular. This could mean big changes when it's time for Spotify to negotiate royalties and revenue sharing with record labels.
What This Means for Marketers and Musicians
Optimizing for the Platform: Musicians and marketers need to understand and leverage the mechanisms that determine which playlists are featured on the Spotify Search Page. Securing a feature here will increase listens exponentially.
Superstar Collaborations Are Still Important: Connecting with big-time superstars can still help a playlist grow. However, there may be less power here than marketers used to believe.
Use a Mix of Approaches: Be sure that your approach combines popular artists and platform-feature mechanisms.
Use Data to Drive Decisions: You need to use data to understand the impact of different strategies. This way, you can target your promotional efforts better.
The Bigger Picture: Evolving Music Ecosystem
These findings highlight the different factors that make some music heard while other music is left unheard. Tech companies are changing the dynamics of how musicians and listeners find and interact with music.
As platforms such as Spotify gain influence over discovery, there may be big changes to how music is made, promoted, and consumed. New opportunities might come out of that. Independent artists could find new ways to work. But these changes also create questions of fairness and what will become of diversity in the streaming age.
Looking Ahead: Questions for the Future
Several questions come up as we try to figure out the future of music marketing and streaming.
How might we change the rules to ensure fairness on the platforms?
Will the major labels come up with any new strategies to counter the power of platforms?
How will smaller labels and independent artists compete in this environment?
What role will AI and machine learning play in selecting featured playlists?
Answering these questions will help determine what the music industry is going to look like for the years ahead. It's important for all—musicians, marketers, and fans—to keep tabs on these evolving dynamics.
This study reveals important information about how power works in the streaming music world. By understanding these forces, marketers and musicians can make more informed decisions about how they are going to succeed in the digital age. As the industry changes, those who can respond to these new realities will be in the best position to survive and thrive.
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