WASHINGTON (dpa-AFX) - Music streaming service Spotify is testing a new ad unit called 'Sponsored Songs' on its free service, enabling labels to promote songs on playlists for a fee, TechCrunch reported.
Instead of appearing as ad banners like the platform's existing ads, labels can pay to have sponsored songs appear on playlists followed by a user, according to the report.
Spotify is said to be testing by putting sponsored songs in free users' playlists, using the service's algorithms to match the songs to a user's musical tastes.
These sponsored songs will be instantly playable and saveable without requiring an initial ad click first. It will only be featured on the service's free tier.
While Spotify has sponsored playlists since last year, this is seen as a new arrangement of labels paying to get specific singles placed. Spotify users can turn off sponsored songs by opting out of hearing them by toggling off the settings in the app.
If the test is successful, Spotify reportedly hopes to roll out Sponsored Songs ads officially, though it would only appear to users on the free tier. Sponsored content could enable Spotify to generate new revenue streams as it aims to go public.
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