To turn things around, Spotify has taken a revenue-growing aspect utilized by many other large social media platforms: selling targeted advertisements to non-paying users.
Kiss privacy goodbye
In her article written for Quartz, writer Amy Wang noted that Spotify has developed a “’real-time moments’ advertising tool that lets brands connect with listeners depending on what they’re most likely doing at that moment, such as partying, having dinner, or working out.”
She also noted that Spotify’s most enticing features are also its creepiest. “Spotify’s meticulous data-crunching is part of what makes its signature personalization features like Discover Weekly so great.” While personally curated content can surely be appreciated by some, these features now must come at a privacy cost for the listener – a payoff that some may find to be more negative than is tolerable. As Wang pointed out, “Spotify has a financial incentive to pry more deeply into users’ listening habits and sell ads aligned with their specific lifestyles.” Essentially, each user’s listening habits are marketable material Spotify uses to generate profit; and in the process of making their profit, they collect and sell intimate data that some users may find extremely intrusive.
what’s in it for musicians?
There are positives and negatives to the move Spotify is making. On one hand, if they are able to finally turn a profit, they may offer larger payments to bands who allow Spotify to play their music. It also allows them to keep their free service, which is its core base, and temper criticisms about their less-than-stellar pay scale. This would be especially beneficial to our local Austin artists, and for small artists everywhere, who make a negligible amount of money selling and streaming their music.
Spotify is walking a thin line
However, all of this assumes that all current users will not be disturbed by the lack of privacy. It also assumes that potential new users won’t be deterred from signing up. Spotify is taking a risky gamble here by tampering with so much sensitive user information – but they also aren’t doing anything new. Given that so many social media sites do the exact same thing, they’re in good company. That said, it would be silly for them to ignore the risks of selling intimate data – because, after all, the consumer is still king.