Spoti-pay for Spoti-plays?

Music marketing and advertising are always changing, and a new feature from Spotify is making some in the industry question if the service is turning into a pay-for-play streaming system.
WordPlay T. Jay first ran into this question after seeing a Rolling Stone article about Marquee, which Spotify says aims to “drive incremental streams during the critical first weeks of a new release and help build an audience that keeps streaming over time and remains engaged.”
Essentially, Spotify charges an artist or label 55 cents per click on ads that pop up in full-screen notifications, and the artist or label must spend $5,000 minimum to use Marquee.
When it comes to deciding if this is a pay-for-play scheme, there are many factors to consider.
In the “No” column are the following reasons:
1. Most social media also offers advertising services to grow a business
2. Any business costs money to grow and market
3. You can still grow followers cheaper through things like Facebook ads and other social media
4. Spotify is not forcing artists or labels to use Marquee
On social media, ads are used as a filter to get content to the right people, the people who would be most interested in it. Ads, in some ways, make social media better for that reason, because everything is more tailored to your interests versus you having to wade more through content to find what you want.
Another benefit of advertising elsewhere on social media, T. Jay believes the 55 cents per new listener cost is extremely high. He said you can reduce that cost to as low as a penny, or 10 to 15 cents via Facebook ads.
Ultimately, the only thing that really matters is that you are offering good content. Is your content remarkable?
People who say “Yes” Marquee is pay-for-play point to the following reasons:
1. The algorithm does not allow you to flourish
2. Streaming royalties are low, so return on investment is low
3. Pandora and other streaming services offer free marketing tools
Regarding the algorithm, people say if you put out a new song and it doe not get exposure, or it gets exposure but people are busy or for some other reason did not engage with it, you will get punished by the algorithm. By introducing Marquee, Spotify is allowing people with higher budgets to pay past the algorithm.
Royalties are also fairly low. A $5,000 investment on Marquee would give you only 9,000 new listeners, but 1 million streams in a month on Spotify only pays out about $3,900. For many, the return is not worth the investment.
Marketing-wise, there are many ways to promote music without spending money, like basic social media posts or through a blog or vlog. Spotify may be acting as payola in some ways because it is encouraging artists to pay for a service they can get for free elsewhere.
So, where do you stand on the argument?
Ultimately, T. Jay does not think Marquee is a pay-for-play scheme because, in the end, everyone has access to the same tools as major record labels at this point. Budgets and opportunities may be different, but with the power of the internet, artists can do a lot more for a lot less.
“You just need to make good music, market it and monetize,” T. Jay said. “That’s what this page is all about.”