Gatekeeper of the Music World

disseminate cultural works such as music, books or videos. This is made possible, on the one hand, by digital programs and tools that are readily available to many people today. Open digital platforms, on the other hand, enable works to be made accessible to the entire world at little expense. “Today you really need only a smartphone or a laptop to record music and upload it to YouTube or Spotify,” says Luis Aguiar, who is a DSI professor of management and economics of digital transformation at UZH.

This evolution has led to a boom in music production. For listeners, this is a blessing, on one hand, because no record store in the world can even come close to carrying such an extensive offering of music in stock as streaming platforms do. On the biggest platform alone – Spotify – 100 million songs are currently available, by the company’s own account. However, that abundance is also a curse: “We have so many songs and music tracks at our fingertips that we can’t pay attention to them all,” Aguiar explains. Who determines, then, which ones receive more or less of our attention?

Up until a few years ago, music was distributed by and brokered through very different operators such as radio stations and record stores. “Today most music gets listened to on the big streaming platforms,” Aguiar says. This means that the big record labels, which still exist, have to bring their music to listeners via the streaming service Spotify which, with its 236 million subscribers, dominates this market in the West. Most of the music gets streamed on the platform from playlists, to which users can subscribe. The 25 playlists with the most users are all controlled by Spotify. “That gives the company opportunities to exert tremendous influence over which music gets heard,” Aguiar explains.

Those 25 playlists are all curated, with one exception. This means that their content is not determined by algorithms, but by Spotify editors who deliberately select tracks for them. The only uncurated list in that group is the Global Top 50 playlist of the fifty most frequently streamed songs worldwide.

The curated playlists have a sizeable impact on whether songs get streamed or heard frequently, Aguiar has proven. If a song appears on the most popular curated playlist worldwide – Today’s Top Hits –, its number of streams increases by an average of 20 million, or by almost 25%. By comparison, a song featured on the uncurated Global Top 50 playlist notches only 3% more streams. “So, Spotify really does have the possibility to determine what music we hear,” Aguiar infers.

Spotify also wields enormous influence when it comes to discovering new music tracks. The platform provides New Music Friday playlists for that purpose. Every Friday, new tracks from established artists and little-known ones are added to the country-specific playlists. Aguiar has demonstrated that they have a big impact on the dissemination of new tracks: songs ranked number one on the New Music Friday playlist in the USA, for example, rack up 13 million more streams as a result.

Spotify also uses personalization algorithms to suggest new music tracks to its users based on their prior preferences. What influence those recommendations have cannot be determined on the basis of the data available. However, it can reasonably be assumed that the information on users’ listening preferences informs editorial decisions when compiling playlists. “Spotify can closely observe our behavior, giving it a gold mine of information,” Aguiar explains. “It seems only logical to integrate it into editorial recommendations.”

The curated playlists accounted for 12% of all music streaming of the 200 most popular songs on Spotify in 2017. That share has since increased to 16%. Approximately 80% of those streams originate from playlists controlled by Spotify. This means that the playlists put together by Spotify have gained influence over listening habits. “That’s a good sign for everyone,” Aguiar says, “except for the big record labels.” That’s because for its playlists, Spotify favors music not from the big labels, but from smaller, independent ones.

Aguiar says that Spotify deliberately uses its numerous playlists to audience-test promising music from indie labels in order to afterwards promote it more prominently on its flagship playlists. The share of indie music on Spotify playlists continually increased between 2017 and 2020, enabling Spotify to steer users’ attention more toward lesser-known independent music. In Aguiar’s opinion, Spotify thus has in fact brought about a kind of democratization of access to music.

However, Spotify hasn’t done that for purely idealistic reasons, but has been motivated largely by economic self-interest. “Music from big record labels generally costs Spotify more money,” Aguiar says, because the major labels use their market power to squeeze higher royalties per song from Spotify than indie labels receive. “By offering more music from indie labels, Spotify can lower its costs while creating added value for its users at the same time,” he explains.

Even though Spotify has taken over the role of gatekeeper in the music world and its curated playlists exert a big impact on what music gets listened to a lot, the platform nonetheless relies on the big record labels because they still produce most of the music that gets streamed.

By Spotify’s own account, around three-quarters of the content streamed in 2023 originated from the four labels Universal Music Group, Sony Music Entertainment, Warner Music Group and Merlin, an independent digital content licensing network. This means Spotify needs that music to stay attractive for users. “If Spotify loads its flagship playlists with music that users don’t like as much, they will stop subscribing to them,” Aguiar explains.

He has analyzed the quantitative effects that Spotify’s curated and algorithmically assembled playlists have on music consumption, but has not examined their qualitative effects on music production. “Some claim that certain genres like hip-hop, for example, have grown tremendously with streaming,” Aguiar explains, but that assertion isn’t backed by formal research, he adds. The Spotify playlists with the most listeners can gives clues about the popularity of respective genres: the non-genre-specific Today’s Top Hits and Global Top 50 playlists are followed sequentially in terms of number of listeners by playlists featuring rap, Latin music and reggaetón.

Aguiar brings up another impact that streaming platforms may potentially have on the actual structure of music tracks: “Spotify only pays for songs that are streamed for a least 30 seconds.” This means that musical compositions must grab listeners within the first half-minute to keep them tuned in. Songs with long intros, for example, would have a harder time doing that given users’ short attention spans. This means that the way in which Spotify compensates artists for streams of their music can exert an effect on the compositions themselves. “That’s not surprising,” Aguiar says. “Even artists follow economic incentives."