What Drives Demand for Playlists on Spotify?

Abstract

We provide estimates of the drivers of playlist followers on Spotify. We base our
analysis on a unique panel data set for 30,000+ popular playlists and combine it
with data on how prominently these playlists are featured in the Spotify app. Using
two-way fixed effects and staggered synthetic difference in difference models, we
compare the effect of two important demand factors in our data—featuring playlists
on Spotify’s Search Page and adding songs by exceptionally popular major label
artists to playlists. We find that users prefer to follow playlists featured in the app.
According to our estimates, being featured on the Search Page raises daily playlist
followers by 0.95%—which is about two times larger than the effect on followers
of including a song by an exceptionally popular major label artist (0.45%). Our
examination of playlist demand has two important implications. First, Spotify can
effectively guide user attention to certain playlists, fueling concerns among industry
executives and artists about its potential to favor some producers by promoting
selected content. Second, popular artists signed with major labels play an important
role in attracting followers to playlists on Spotify.

Keywords: playlist followers, music streaming platforms, playlist featuring, major record labels, causal inference