Following a year of major financial losses, Spotify has decided to ramp up its sponsored content—and some users have already seen what the streaming service has up its sleeve.
Those who use Spotify’s free tier may have noticed a new ad unit called Sponsored Songs. The feature basically allows record labels to promote singles on playlists—and potentially other areas of the service—for a price. A Spotify official confirmed the company was testing this feature to TechCrunch on Monday.
According to TechCrunch's report, the Sponsored Songs will be integrated into playlists, and will be selected based on each user’s music tastes. You can check out an example of the feature in the Twitter image below. The Sponsored Song—which, in this case, is NEIKED’s “Call Me”—will be appear above a playlist and will be instantly playable and savable.
It is not immediately clear how Spotify will charge the labels—whether it will be based on impressions, actions, listens, etc. If the testing is successful, the Sponsored Songs feature will get an official roll out; however, it will only be featured on the free tier service.
It may be an annoying feature for some Spotify users, but it isn’t exactly surprising. The streaming service is now looking for ways to increase its revenue after losing an estimated $601 million last year—a huge loss considering its number of users have increased to 140 million. Perhaps this Sponsored Song feature will motivate the free users to cough up dough.