Spotify testing Sponsored Songs on free tier

Call Me by NEIKED appears as a Sponsored Song above this playlist

Spotify is testing "Sponsored Songs", an option that will remind some of the dark days of broadcast radio payola, when labels often "paid" DJs and programmers to get a song on the air.

The Sponsored Songs feature are set to target users that are on Spotify's free tier.

Spotify will launch a trial that allows record labels to pay to place songs on users' personal playlists, the BBC reports. The move will allow not only brands to put their ads in popular playlists; it'll also allow labels to promote individual songs. For example, would Spotify start purposefully leave hit songs off playlists hoping to force the music labels into paying to promote them?

The reason that Spotify is trialling sponsored songs as a source of revenue generation is likely to be connected to the fact that it has yet to make a profit.

At the moment, the feature is limited to a select group of free-trial users.

Meanwhile, users who are particular with the songs they include on their playlist need not worry.

A mysterious "Sponsored Content" opt-out setting recently appeared in Spotify, and now the streaming giant has confirmed to TechCrunch what it's about. Users say the song announces that it is sponsored before it plays, however it doesn't seem a sponsored tag is presented visually. This setting is turned on by default. Last year, the company lost around $601 million, despite its increasing number of active users. They aren't as obtrusive as traditional ads and can be targeted to "fit in" with other tracks on a given playlist. It is unclear if this will change if Spotify rolls out the feature more widely - though it is likely those who attempt to turn it off in the future will be asked to pay for a Premium membership.