What Drives Demand for Playlists on Spotify?

This paper estimates the drivers of playlist followers on Spotify using a panel data set for 30,000+ popular playlists and combines it with data on how prominently these playlists are featured in the Spotify app. 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, supporting industry executives’ and artists’ concerns that the platform has the potential to favor some producers by selectively promoting their content. Second, popular artists signed with major labels play an important role in attracting followers to playlists on Spotify. History: Catherine Tucker served as the senior editor for this article. Funding: This work was supported by the Dutch Research Council [NWO 451-17-028] and the Tilburg Science Hub. Supplemental Material: The online appendices and data files are available at https://doi.org/10.1287/mksc.2022.0273 .