Abstract

We provide estimates of the drivers of playlist followers on Spotify. We base our analysis on a unique panel data set for 30,000+ popular playlists and combine it with data on how prominently these playlists are featured in the Spotify app. Using two-way fixed effects and staggered synthetic difference in difference models, we compare the short-term effect of two important demand factors in our data---featuring playlists on Spotify's Search Page and adding songs by exceptionally popular major label artists to playlists. We find that users prefer to follow playlists featured in the app. According to our estimates, being featured on the Search Page raises daily playlist followers by 0.95%---which is about two times larger than the effect on followers of including a song by an exceptionally popular major label artist (0.45%). Our examination of playlist demand has two important implications. First, Spotify can effectively guide user attention to certain playlists, fueling concerns among industry executives and artists about its potential to favor some producers by promoting selected content. Second, popular artists signed with major labels play an important role in attracting followers to playlists on Spotify.

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