Now that Spotify has over 50 million people in 58 countries using its online music service, the company is doing its best to tell those listeners which up-and-coming artist will be the next big thing.
"One of the things we use data for is to really understand—and we believe we've gotten pretty good at this—what artists or what songs are going to be hot," Jeff Levick, Spotify's chief business officer, said Tuesday at the Appnation conference in Las Vegas. "We put a lot of our energy and time behind these artists and behind these songs to promote them."
Levick, speaking in an on-stage interview with CNBC.com, said the company's in-house talent hunters look for lesser-known musicians that are seeing spikes in engagement on the service to help determine "if this is something that's going to catch fire." At that point, Spotify reaches out to the artists' managers to work on accelerating the growth.
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Using technology and data to predict artist success is one way Spotify is aiming to differentiate itself in a crowded online music market that's rapidly moving to mobile. Internet radio service Pandora is built on algorithms that guess what consumers want to hear, and Apple is going beyond paid downloads by offering an iTunes Radio service.