NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Platforms, Promotion, and Product Discovery: Evidence from Spotify Playlists

Luis Aguiar, Joel Waldfogel

NBER Working Paper No. 24713
Issued in June 2018
NBER Program(s):Industrial Organization Program, Law and Economics Program

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.

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Document Object Identifier (DOI): 10.3386/w24713

 
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