Labels making ‘playola’ payments to get songs on Spotify playlists

The streaming music era means new rules — and new ways to game the system. In the ’50s and ’60s, devious record industry execs made headlines for paying DJs to get their music on the air. The practice, called payola, was banned, thought it never really went away, only underground. Now it’s haunting music streamers like Spotify.

Dubbed “playola” in a report from Billboard and others (cute, right?), it has been revealed that record labels sometimes pay for placement on high-profile playlists. Considering that some playlists — like Songpickr: Best Songs 2015 and Viral Hits — have six-digit subscription numbers, getting a song on one of these playlists is now “a very, very big deal,” according to founder of Glassnote Records (home of Mumford & Sons) Daniel Glass. Record labels are willing to pony up thousands of dollars for placements, according to the report, but Spotify may soon be cracking down.

The upshot of a playlist placement can be huge. The report cites examples of music supervisors, who are responsible for choosing songs you hear on TV shows and movies, listening to them for ideas, and terrestrial radio stations using them to keep track of — and maybe even air — hot new songs. At the very least, a playlist placement means that subscribers will likely listen to the track and share it elsewhere — and more streams means more money for copyright holders.

Playlist payola (or playola, perhaps) has become so vital to major label marketing strategies that Universal, one of the three major record labels, has a senior position called “Global Streaming Marketing.” Jay Frank was previously founder of DigSin, “a singles-focused company [called DigSin] that leverages streaming promotion to foster artist growth” and data-driven music marketing firm DigMark according to Hypebot. The Billboard report explains that DigMark, as well as other major music groups, “have paid influential [streaming] curators to populate their playlists with their clients’ music.”

Payment for playlist placement can range from “$2,000 for a playlist with tens of thousands of fans to $10,000 for the more well-followed playlists” according to the report. Notably, these fees are substantially less than the hundreds of thousands it can cost for radio pluggers to get a song on commercial radio. And some industry execs do think that pay for play placement is fairer than what they were used to before. “If one playlister doesn’t like us, we go onto the next one,” said Streaming Promotions co-founder Charles Alexander to Billboard. “At consolidated radio, if someone doesn’t like us, we’re dead in the water.”

That being said, a Spotify exec told Billboard that the company is trying to put a stop to the practice. Spotify head of communications Jonathan Prince said the new terms of service set to launch soon will prohibit “accepting any compensation, financial or otherwise, to influence … the content included on an account or playlist.” Whether or not Spotify will be able to effectively police pay-for-play “playola” remains to be seen.