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Spotify Wants Your Data. Could That Be A Good Thing?

Spotify CEO Daniel Elk. CREDIT: AP/TT/JANERIK HENRIKSSON
Spotify CEO Daniel Elk. CREDIT: AP/TT/JANERIK HENRIKSSON

Spotify announced a new privacy policy last Thursday. It did not go over well. The policy, like all the terms and conditions users are obligated to sign to exist on the internet, detailed how Spotify may “collect information store on your mobile device, such as contacts, photos, or media files,” and “collect information about your location based on, for example, your phone’s GPS location.”

The language within it was so aggressively Big Brother, so The-Circle-is-actually-reality-now, that it prompted immediate outrage from a vocal contingent of Spotify’s 75 million-strong userbase. News outlets deemed it “eerie” and “real creepy.”

In response to that alarm, Spotify CEO Daniel Ek wrote a blog post — title: “SORRY.” — clarifying how privacy permissions would operate:

Let me be crystal clear here: If you don’t want to share this kind of information, you don’t have to. We will ask for your express permission before accessing any of this data — and we will only use it for specific purposes that will allow you to customize your Spotify experience… We also share some data with our partners who help us with marketing and advertising efforts, but this information is de-identified — your personal information is not shared with them.

Elk signed off by assuring users that he “heard your concerns loud and clear.” Spotify, naturally, does not want to be in the backlash business. They want listeners and artists alike to see the platform as a place that only wants the icky things — personal information from users, low pay-per-stream for artists — as a means to a mutually beneficial end. Which means Spotify has to prove it has something significant to offer both parties, something beyond the basics (music, money) that can entice everyone to stick around.

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“I think it shows the line that music consumers, and/or their proxies in the tech/music press, will draw between public and private information,” said Eric Harvey, columnist for Pitchfork on music, technology, and marketing. “I don’t think most people care about the city they’re in being part of their personal ‘file’ on Spotify’s servers, but I do think that, and agree, the interior of one’s phone is a fairly inviolable zone, home to all kinds of information — photos, conversations, passwords and the like — that has long been deemed private. One’s contact list and map-based GPS locations are valuable forms of metadata that can reveal lots of information about one’s life, even if, like the NSA metadata controversy, there’s no actual conversational information revealed.”

The privacy policy incident was reminiscent of the horrified response to the Apple automatic download of U2’s Songs of Innocence to people’s iTunes accounts. Listeners were so furious, Apple had to post instructions for how to remove the “gift album” from iTunes music libraries. (Even Bono apologized.) It’s easy to forget that these services live on our phones and, by design, can gain access to the other information stored on your phone as well.

But backlash to Spotify’s new privacy policy reveals just as much about our collective misunderstanding around how streaming platforms operate as it does about the streaming services themselves. As this excellent Wired guide points out, all streaming services collect virtually the same data on listeners. That’s how they can provide a more “personalized” experience.

It makes Spotify, which is a platform that has no shortage of controversy around it, look more and more like it’s using its power to help artists, instead of pulling money out of their pockets.

By tracking what you listen to and when you listen to it, Spotify can, say, prompt you at 6:00 p.m. on a Wednesday to put on a running playlist, or recommend new music based on an analysis of your listening history and the playlists other other users. If that’s the kind of individualized experience you want from a Spotify (or Songza, or Pandora, or Apple Music, and so on), then the cost of that experience is your data. To expect these companies to be able to offer that service without mining your data in return would be like expecting a personal shopper to buy you a dream wardrobe without giving that person your tastes and measurements.

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“Identity-driven information gathering techniques like these are essential to the functioning of these services,” said Harvey. “If Spotify (or Google, or Pandora, or Apple) didn’t constantly query its users about their activities and tastes, they would be much less of a service and more of an archive, reliant on the user to navigate their way through.” This “information-gathering process” doesn’t look, at first glance, like major recon; it looks like “mild psychological games,” Harvey said, like the “thumbs up/thumbs down” function on Pandora or Songza, or the voting on Spotify radio stations. “This is a large part of the appeal of these platforms, aside from the access they offer: it’s sort of fun to click around and have your taste mirrored back to you by a service that is devoted to making this process as ‘accurate’ as possible.”

In related news, country star Hunter Hayes — who released his EP 21 only on streaming platforms; it is still not available as a digital download or in physical form — announced last week that he’d used Spotify data to decide where his tour should stop. As Mashable reported, “Spotify pinpointed cities, particularly with college markets, where Hayes’ music was ‘over-indexing’ (i.e. where he’s popular compared to other locations).” Hayes will be taking the 21 tour to Western Carolina University, Kent State University, West Point Eisenhower Hall Theater, Purdue University, Western Kentucky University, University of Oklahoma and Wake Forest University.

The Hunter Hayes news is, on its face, a win for the artist and for the streaming platform. From the artist’s side, “It makes Hunter Hayes look forward-thinking in terms of technology, and it makes him look loyal to the fans who are listening to him,” said Harvey..

Who knows how influential the Spotify data really was in determining where this tour should go? No one from Hayes’ camp was available for comment. But it’s worth noting that none of these stops is particularly shocking, considering Hayes’ fanbase — for context, he got his start opening for Taylor Swift’s “Speak Now” tour in 2011 — and where he’s gone in the past. His 2014 “We’re Not Invisible” tour, for instance, played the the U.S. Cellular Center in Asheville, North Carolina (an hour’s drive from Western Carolina University) and Youngstown, Ohio (about 40 minutes from Kent State University). Not exactly gambles.

The announcement “also makes Spotify, which is a platform that has no shortage of controversy around it, look more and more like it’s using its power to help artists, instead of pulling money out of their pockets,” said Harvey. “Spotify is sort of the whipping boy for a lot of those debates, whether it’s Taylor Swift or indie artists.”

As you may recall, Swift, generous overlord of the pop universe, pulled her music from Spotify a week after releasing her newest album, 1989, last fall, explaining her decision to TIME by saying, “I think there should be an inherent value placed on art. I didn’t see that happening, perception-wise, when I put my music on Spotify.” Her proclamation amplified complaints independent musicians had long expressed.

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A source at Spotify denied that the Hayes announcement was a concerted effort to rebrand as a pro-artist service after Swift’s exodus from the platform. The partnership with Hayes “is part of a number of things we do every single day, to help get great music out there. But we’re not doing this as a direct response to any criticism.”

Though we spoke before the privacy policy fallout, Spotify emphasized that all the data collected by the platform is “all anonymous. It’s not like we’re giving over, ‘I listened to this Hunter Hayes song 27 times.’ It’s based on the aggregate data that we have: Here are the towns that index higher. Not: This is what this human being, named X, listened to, at this time, in this town. I don’t even know if we do have that data.”

According to Spotify, Hayes didn’t have to pay for data he reportedly used to plan his tour. “We have an open dialogue with artists, managers, and labels. We work with them to help them achieve any number of their goals.”

Harvey’s hunch is that, while the data could be given to an artist of Hayes’ stature gratis because of the publicity boost for Spotify, “I would suspect that Spotify wouldn’t be as open with data with smaller artists. But that becomes circular, because smaller artists will have less data to deal with anyway.”

What Spotify is up to here isn’t brand new. Pandora has a similar venture, Pandora Presents, a free concert series that matches performers to locations by “analyzing the musical preferences of local listeners.”

Data is maybe the most valuable currency that we have going right now.

Streaming services like Spotify are making moves in these other markets by banking on the possibility that the real currency here is proprietary user data, not music. Listeners, in a way, are more important to these services than artists; we may well reach a point where, with a few high-profile exceptions, just about every musician’s catalog is available on just about every platform. What will make one service more desirable than another will be how it caters to you. And what makes that platform attractive to artists, in turn, is how much any given platform knows about the people who use it. iTunes pays 40 cents a download to Spotify’s 17 cents a stream. But data is priceless.

The freemium model — where some users listen to music without paying, as long as they’re willing to put up with advertisements — is in its last days, Harvey predicts. This means “the exchange is purely data-for-data. Users get digital music streamed to them while they stream back torrents of personal data in exchange.” This is a tradeoff, he said, not dissimilar from the one people make with Facebook and Google every day: “How do individuals define privacy in these circumstances, and to what degree is it worth giving up elements of that privacy for a music service tailored to them?”

That means you can expect to see Spotify and the like flexing their data muscle in all sorts of arenas. There’s the live music space, where Spotify and Pandora are already trying to make tracks by demonstrating to labels that they “are not music providers only but [can be] tour planning assistants,” said Harvey. “Like a partnership.” Spotify can’t really get in on touring revenue, where a significant chunk of music industry money is made, but “[they] can at least make [their] presence known there,” said Harvey. “Maybe in the future, Hunter Hayes will say his tour is ‘Sponsored by Spotify,’ and at the merch table, they’ll be handing out Spotify download cards.”

All these moves contribute to Spotify’s attempt to prove the value its platform has for musicians. Spotify’s reputation, post-Swift-breakup, is not an especially artist-friendly one. Spotify can’t, or won’t, bring the 40-cents-per-download to the table that iTunes can. But it can offer “these sort of ephemeral, added-value components to their service,” Harvey said, to convince labels that it’s worth keeping music there. It is, sort of, the streaming equivalent of start-ups that offer “perks” to employees in place of actual raises.

“You can broaden that out to think about, well, data is maybe the most valuable currency that we have going right now,” Harvey said. “Although it doesn’t manifest itself in a monetary value, it’s information value. It is extremely important… Getting a hold of data, that’s part of the game right now in music.”

In addition to proving its worth with listeners and artists, Spotify is using data to demonstrate its value to the music industry at large. No one is quite sure, yet, how valuable a single “stream” of a song really is: It’s not as big a deal as radio play, where one play can be heard by millions of people at once, or as big a deal as a purchase. So when Spotify crowns Rihanna the “most-streamed” female artist on the site, it’s not entirely clear what that metric means.

But what Spotify can try to do with data is position itself “as not just a service provider for listeners, but as a research organization,” said Harvey. Spotify can, he said, present themselves as a platform that is “not just working with artists, [is] also capable of being a Nielsen.”