Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists

44 Pages Posted: 18 Jun 2018

See all articles by Luis Aguiar

Luis Aguiar

University of Zurich - Department of Business Administration

Joel Waldfogel

University of Minnesota - Twin Cities - Carlson School of Management; National Bureau of Economic Research (NBER); University of Minnesota - Twin Cities - Department of Economics

Date Written: June 2018

Abstract

Digitization has vastly increased the amount of new music produced and available directly to consumers. While this has levelled the playing field between already-prominent and new artists, creators may now be dependent on platform decisions about which songs and artist to promote. With Spotify emerging as a major interactive streaming platform, this paper explores the effect of Spotify’s playlists on both the promotion of songs and the discovery of music by new artists, using four approaches. First, we examine songs’ streaming volumes before and after their addition to, and removal from, major global playlists. Second, we compare streaming volumes for songs just on, and just off, algorithmic top 50 playlists. Third, we make use of cross-country differences in inclusion on New Music Friday lists, using song fixed effects to explain differences in streaming. Fourth, we develop an instrumental variables approach to explaining cross-country New Music Friday rank differentials based on home bias. Being added to Today’s Top Hits, a list with 18.5 million followers during the sample period, raises streams by almost 20 million and is worth between $116,000 and $163,000. Inclusion on New Music Friday lists substantially raises the probability of song success, including for new artists.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Aguiar, Luis and Waldfogel, Joel, Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists (June 2018). NBER Working Paper No. w24713. Available at SSRN: https://ssrn.com/abstract=3198015

Luis Aguiar (Contact Author)

University of Zurich - Department of Business Administration ( email )

Rämistrasse 71
Zurich, CH-8006
Switzerland

Joel Waldfogel

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Minnesota - Twin Cities - Department of Economics ( email )

271 19th Avenue South
Minneapolis, MN 55455
United States

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