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Digital platforms have gained strong economic positions in many industries. On the one hand, they enable more providers than ever before to make their products, services, or information available. On the other hand, this means that more providers now compete for users’ attention. The user interface (UI) of platforms acts as a digital shelf space. A new study by Dr. Leonard Rackowitz (University of Hamburg Business School, University of Hamburg) and Ola Haampland (University of Inland Norway), uses a global music streaming dataset to show the extent to which the UI steers demand on platforms.
Digital platforms have become central to our online lives. From social media and search engines to platforms for e-commerce, travel, food delivery, and streaming, they act as intermediaries for a range of offers. Unlike physical marketplaces, whose assortment is limited by shelf space, digital platforms can offer an almost unlimited assortment – especially when it comes to digital goods. Their UIs act as a digital shelf space and structure the large variety of options. Since some platforms have become strong and established market players, the question arises as to what extent their UI decisions influence user decisions, which in turn can determine the success or failure of providers on platforms.
To investigate this question, researchers Dr. Leonard Rackowitz, post-doctoral researcher at the professorship of Marketing and Media at University of Hamburg Business School, University of Hamburg, and Ola Haampland, University of Inland Norway, analyzed how a comprehensive global design change to Spotify’s UI affected the consumption of certain playlists in 38 countries. Thereby, the popular “Top 50” playlists swapped a salient display in the UI for a less salient one. One of the changes was that the “Charts” category, which includes the “Top 50” playlists, went from having the highest position to being one of many categories in the unified tile design. In addition, after the update, the playlists faced increased competition from a broadened offer of personalized playlists.
The analyses show that consumption of these playlists declined by more than half after the update. The so-called “inclusion effect” – meaning the uplift in streams for songs crossing the threshold into the “Global Top 50” playlist – dropped from 5.2% to only 2.1%, a decline of 59%. For those country-specific “Top 50” playlists, which reflect consumption in the three largest Western markets, the declines were 57% in the United States, 66% in the United Kingdom, and 64% in Germany. These changes have economic implications as streaming royalties are distributed based on the share of total streams on the platform. After this update, market share shifted from top songs to a broader range of songs.
“This could weaken the market position of major labels, which traditionally focus their resources on producing hits and therefore need to adapt their strategies to an increasingly fragmented music market”, says Dr. Rackowitz. “At the same time, the study shows that artists and other rightsholders benefit when their songs are included in favorably presented playlists.”
Spotify decides both how playlists are displayed in its app and, in the case of its own playlists, the selection of songs included in them. The criteria for song selection in many playlists are not completely transparent to outsiders. With “Discovery Mode”, Spotify offers rightsholders the opportunity to receive preferential, but not guaranteed, inclusion in certain algorithmic recommendations – in exchange for a reduced payout rate for the streams generated this way.
With the rise of digital platforms, market participants are thus confronted with both new opportunities and challenges. On the one hand, from a provider perspective, digital platforms have dramatically lowered barriers for market entry. While in the CD era, releases largely depended on the decisions of both record companies and retailers, today more artists can make their music available to a global audience like never before. Over 100,000 new songs are uploaded every day on Spotify alone. “Platform users not only benefit from affordable, often free access to a broader variety of offers, but also from the opportunity to act as providers themselves”, highlights Dr. Rackowitz. “On the other hand, this means that now more providers compete for users’ attention on just a relatively small number of relevant platforms.”
The UI directs this attention and thus becomes an influential tool for platforms in digital markets. It influences individual user decisions, competition, and the distribution of economic value. As this substantial influence is concentrated in the hands of a few platforms, questions arise from societal and political perspectives regarding the necessary degree of transparency in platform decision-making.
Dr. Leonard Rackowitz
University of Hamburg
University of Hamburg Business School
E-Mail: leonard.rackowitz@uni-hamburg.de
Rackowitz, L., & Haampland, O. (2025). The sound of salience: How platform design impacts consumption. Information Economics and Policy, 71, 101144. https://doi.org/10.1016/j.infoecopol.2025.101144
https://doi.org/10.1016/j.infoecopol.2025.101144 Publication
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