Spotify’s Secret Plan to Avoid Paying Royalties to Real Artists Exposed
According to a new book, “Mood Machine: The Rise of Spotify and the Costs of the Perfect Playlist,” Spotify has been promoting “ghost artists” to avoid paying royalties to real artists. The book reveals that the streaming platform has a secretive internal program called “Perfect Fit Content” (PFC) that prioritizes cheap and generic music.
PFC involves a network of affiliated production firms creating low-budget stock muzak for Spotify, and a team of employees placing tracks from those firms on curated playlists. The goal is to increase the percentage of total streams that are cheaper for the platform, which has become one of Spotify’s biggest profitability schemes.
Former employees revealed that playlist editors were pressured to add PFC songs to playlists, with some feeling uncomfortable about the practice. The program has reportedly become widespread, with over 150 playlists populated almost entirely by PFC content.
The book also highlights the poor treatment of musicians who work with PFC partners. A jazz musician who created tracks for a PFC partner was offered an upfront fee of a few hundred dollars and did not own the master rights to the track. After the tracks gained millions of streams, the musician realized he may have been ripped off.
The most egregious aspect of this scheme is that Spotify is doing so to avoid paying infinitesimally small royalties to real artists, which typically only make a fraction of a cent per stream. Spotify’s CEO, Daniel Ek, has denied the company creates music in-house, but his statement that the cost of creating content is “close to zero” raises questions about the company’s true practices.
This exposé raises concerns about the ethics of Spotify’s business practices and the impact on real artists. The company’s silence on the matter only adds to the controversy.
