Spotify Is Allegedly Filling Out Its Playlists with “Ghost Artists” to Minimize Royalty Expenditures, Increase Profit Margins

Spotify Is Allegedly Filling Out Its Playlists with "Ghost Artists" to Minimize Royalty Expenditures, Increase Profit Margins

As a seasoned gamer and music enthusiast with decades of experience under my belt, I find the Spotify situation utterly disheartening. I’ve seen the rise and fall of countless artists, the thrill of discovering new talent, and the heartbreak when they’re overlooked due to industry machinations.

According to an investigation spanning multiple years and published in Harper’s Magazine, Spotify is accused of using a network of production companies to populate its playlists with music from fictitious artists, known as “ghost artists.” This practice allegedly helps them cut down on royalty payments and boost their profitability. Since 2017, these companies have been generating music called “Perfect Fit Content” (PFC), which is attributed to numerous artist profiles. When PFC tracks are streamed, they are cheaper for Spotify to host because the platform doesn’t need to pay royalties to external artists as the music was internally produced.

Playlists on Spotify such as “Ambient Relaxation,” “Cocktail Jazz,” and “Bossa Nova Dinner” predominantly consist of tracks by PFC (Pulselocker Featured Creator) musicians, with millions upon millions of these songs being streamed. An intriguing instance from an article in Harper’s Magazine highlights a Swedish production company, which employs 20 songwriters responsible for over 500 “artists” on Spotify. On the app, the profiles of PFC tracks often lack information, yield vague results when searched, or, as reported in the article, may even present fabricated biographies.

In today’s music industry, heavily reliant on streaming-based earnings, the rise of “ghost artists” and PFC (pretend or fake) music poses a significant threat to struggling musicians who currently receive minimal income from streaming. For instance, Spotify CEO Daniel Ek has sold approximately $345 million USD worth of his personal company shares since July 2023, an amount that an artist would need to generate through 115 billion streams in a single year to equal. This is 15 billion more streams than Drake, Spotify’s top-streamed artist ever, has accumulated on the platform since his music debut over a decade ago. To give you an idea of what a working musician earns from a service like Spotify, Takuya Kuroda, a trumpeter known for his modern jazz classic “Rising Son,” which celebrated its 10th anniversary this year, has around 157,000 monthly listeners and his most popular track, a remake of Roy Ayers’ “Everybody Loves the Sunshine,” has been streamed 25 million times in a decade. This translates to approximately $59,500 USD, or about $5,000 USD per year, before management, label, and distribution fees are deducted.

Spotify has dismissed these allegations as completely false. Nonetheless, it’s been pointed out that some Spotify playlist curators have departed from the company due to dissatisfaction with the idea, and were subsequently replaced by editors who were more amenable to the PFC (Playlist for Content) model. One of these former curators stated, “If the numbers increase, let’s just keep replacing more and more, because if the user doesn’t notice, it’s okay.” In June, Ek also tweeted that creating content essentially costs nothing.

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2024-12-21 18:56