Spotify’s Allegations of Ghost Artists
A recent report suggests that Spotify is populating listeners’ playlists with “ghost artists” to reduce royalty expenses.
According to Liz Pelly’s findings published in Harper’s Magazine, popular playlists spanning genres from jazz and classical to lo-fi hip-hop include content from ghost artists. This effectively lowers the royalties that Spotify pays to genuine artists, thus boosting their overall profits.
Understanding “Perfect Fit Content”
The practice, referred to as “Perfect Fit Content” (PFC), was introduced to Spotify editors in 2017 to enhance profits by collaborating with various production companies largely based outside the United States.
Pelly’s report highlights that when the issue first emerged publicly earlier this year, a spokesperson for Spotify claimed that the allegations were “categorically untrue, period,” denying that the company was producing tracks with fake artists.
NME has approached Spotify for commentary.
However, she points out, “while Spotify may not have created these tracks, it does not deny that they are included in its playlists.”
The report also references findings from music writer David Turner, who utilized analytics to reveal that Spotify’s “Ambient Chill” playlist had displaced artists like Brian Eno, Bibio, and Jon Hopkins in favor of tracks from Epidemic Sound, a Swedish firm that provides a library of subscription music products, mainly utilized in advertisements and television shows.
Impact on Legitimate Artists
A former employee commented on this practice: “Some of us were truly unhappy with what was taking place. We didn’t appreciate that these two guys who typically write pop songs were replacing numerous artists. It’s just not fair. But it felt like we were trying to stop a runaway train.”
Consequently, it is claimed that fewer royalties are awarded to legitimate artists, while payments are funneled to PFC partners who generate content to be distributed across hundreds of artist profiles, most of which are completely empty, leading to unproductive searches.
By 2023, the team overseeing PFC reportedly managed several hundred playlists. Over 150 playlists, such as Ambient Relaxation, Deep Focus, 100% Lounge, Bossa Nova Dinner, Cocktail Jazz, Deep Sleep, Morning Stretch, and Detox, were almost entirely dominated by PFC content.
The report adds, “Many playlist editors, whom Spotify promoted as music aficionados with extensive knowledge, are uninterested in participating in this initiative.” The company began to hire editors who appeared less concerned about the PFC model.
Another source mentioned the internal sentiment as: “If the numbers are increasing, let’s keep replacing more and more, because if the user doesn’t notice it, then it’s fine.”
Although Spotify has consistently refuted these allegations, CEO Daniel Ek faced significant backlash after he claimed earlier this summer that it cost “almost zero” to create “content.”
The remarks ignited a strong response within the online community, with many music enthusiasts and musicians criticizing the CEO for being “out of touch.”
For instance, KT Tunstall stated, “For example, I don’t create ‘content.’ I make music. You *can* make music cheaply, but you still need equipment. And producing music in my style also requires collaboration and time, which makes it a short-sighted viewpoint on his part.”
Similar sentiments were echoed by The Future of Music Coalition, who remarked: “In fact, creating records can still be costly, particularly if you prioritize fair compensation for your employees.” Primal Scream bassist Simone Marie Butler added: “Get away from you, out-of-touch billionaire.”
Following the backlash, Ek issued another statement, expressing regret for underestimating the difficulties musicians encounter and for using the abbreviated term “content.”
In the first quarter of 2024, Spotify reported a 14 percent increase in premium subscriptions, reaching 239 million, alongside record profits exceeding €1 billion (£860 million). Additionally, reports indicate that Russian artists supporting the war in Ukraine have started to be removed from the streaming platform.
The recent findings arise after a parody site of Spotify Wrapped was taken offline at the request of Spotify’s legal team.
https://www.nme.com/news/music/spotify-is-using-ghost-artists-to-minimise-royalty-costs-new-report-claims-3823856?utm_source=rss&utm_medium=rss&utm_campaign=spotify-is-using-ghost-artists-to-minimise-royalty-costs-new-report-claims
