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Spotify will promote artists' songs to more users if they agree to lower royalty payments

  • As part of an upcoming trial, artists will be able to promote their songs on Spotify to more listeners, but they must agree to a lower royalty rate.
  • Artists can select tracks that Spotify will favor when recommending new music to users.
  • But Spotify won't guarantee that artists' tracks will be added to playlists, and said it would only recommend music it thinks listeners want to hear.
  • The streaming giant announced the new scheme on Monday, and will trial it "soon."
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Artists will soon be able to promote their music to more users on Spotify – provided they take a pay cut on the platform, the streaming giant announced Monday.

Spotify currently recommends new music to listeners using personalized algorithms that are based on the artists a user listens to, the time of day, and the release dates of songs. This accounts for around 16 billion listens a month, Spotify says.

As part of a trial that starts "soon," artists or labels can make specific tracks show up more often in these recommendations, in exchange for lower royalty payments, Spotify said.

In not asking for an upfront payment, Spotify said it was ensuring the service was open to smaller artists.

Artists will be paid less for songs users surface in this way. When asked by The Verge, Spotify declined to say how much lower this "promotional recording royalty rate" was, but added that "the idea is for artist teams to be able to earn a positive ROI by using the tool." 

Read more: A Spotify exec describes how the company is trying to reshape podcasting now that it has a robust group of creators and listeners on its platform

The company said in its press release that its users were its priority, and that artists couldn't use the promotions to override the recommendation system.

"We won't guarantee placement to labels or artists, and we only ever recommend music we think listeners will want to hear," it said.

The test will only apply to Spotify Radio and Autoplay formats, which is where listeners want to discover new music, it said. It would later expand it other personalized areas of its platform, it added.

People have increasingly turned to Spotify and other streaming services during the pandemic as they look for ways to stay entertained at home. Spotify's number of monthly active users grew 29% year-on-year to 320 million in the quarter to September.

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