When money muddies streaming music

As long as there has been a music industry, there has been payola – offering cash or chemical inducements to DJs in order to secure prominent airtime for a new release.

Now payola has infiltrated streaming services, with record companies using cash to influence the songs included on the most prominent playlists, which are supposedly the personal selections of an elite group of tastemakers, according to an investigation.

The rise of streaming, which delivered $1.6bn of music industry revenues last year, has threatened radio's traditional role as the medium which can make or break a record. More than one trillion streams have been tracked on services including Spotify, Deezer and the newly-launched Apple Music this year and hits are now likely to emerge virally from their addition to taste-making playlists.

This has allegedly encouraged the music industry to revert to payola practices, first exposed by a US Congressional bribery and corruption investigation in 1959, which ensnared the rock 'n'roll DJ, Alan Freed.

An investigation by Billboard magazine found that “playlists have become valuable currency in streaming's new world order, so much so that record companies now actively promote – and sometimes pay for – their songs to appear on such services.” Pay for play “is definitely happening.” Billboard quoted a “major-label marketing executive,” one of several disclosing that playlists “can and have been bought.”

The magazine cited DigMark, a digital playlist promotion company that charges record label clients $2,000 for a six-week campaign. Billboard quoted a source who alleged that DigMark is “among those that have adopted some of radio promotion's unsavoury practices, such as paying for placement on playlists, if not buying and thus controlling them outright.”

“Multiple insiders allege that the major music groups - as well as DigMark and a playlist promoter – have paid influential curators to populate their playlists with clients' music. Some third-party users are known to request money to include songs on their playlists,” it was claimed.

The three major music labels – Universal, Sony and Warners - each now have marketing divisions for curating and promoting streaming playlists.

Universal sources said the company did not pay to place songs. DigMark offers playlisters a nominal “$50” fee for their feedback on current tracks with no obligation to add the songs, the source said. The practice is entirely legal.

Spotify, which has 20 million subscribers, defended the integrity of its playlists. “We are absolutely against any kind of pay-to-playlist or sale of playlists,” the company said. Spotify said it would investigate any allegation of “pay-to-playlist” and yesterday tightened the platform's terms and conditions to explicitly prohibit the practice.

DigMark promotes around 75 tracks a week, “seeding” them on to influential playlists, often pushing a song to a matching genre playlist. It has built relationships with more than 400 “playlisters” worldwide and built a database which monitors 1,500 playlists.

DigMark executive Aileen Crowley was asked at the Great Escape music conference if playlisters ever request payment to add a track to their playlists. “Some of them do ask to be paid,” she said, with a number paid “under $100” as a consultancy fee.

“If they like the track, it fits in their playlist, they'll add it,” Crowley said. “These people aren't labels. They just have a playlist they love to curate. And if you have music and cool things to share that they like, you become a trusted source for music.”

The power of playlists

Once the record industry promo guy would leave a DJ with a “$50 handshake” to help ease a song on to the airwaves.

Now streaming playlists have democratised music selection, giving thousands of tastemakers the power to create hits.

Lorde was an unknown New Zealand teenager (called Ella Marija Lani Yelich-O'Connor) until Sean Parker, the technology billionaire, added her Royals track to his Hipster International Spotify playlist. Parker's 800,000 Spotify followers seized upon the track, adding it to their own playlists.

The viral momentum building behind Royals forced radio, TV and traditional media to pick up on the minimalist track, which topped the global charts and sold 10 million downloads.

Zane Lowe's defection from Radio 1 to Apple's Beats 1 radio station transferred one of music's most influential playlist creators to the technology giant.

But his legacy, the Radio 1 Hottest Records In The World playlist, still enjoys 80,000 followers on Spotify.

The most influential playlists

Here are five-track samples of some of the most powerful playlists in the music business

Zane Lowe on Apple Music's Beats 1

S.P.Y - Stardust (feat BCee)

Dr Dre - Genocide feat Candice Pillay, Kendrick Lamar & Marsha Ambrosius

Ice Cube - Friday

FIDLAR - Drone

Wavves - Heavy Metal Detox

Rap Caviar(2.1 million Spotify followers)

Drake - Hotline Bling

Young Dro - We In Da City Remix (feat T.I.)