In 2020, a Swedish newspaper, Dagens Nyheter (DN), exposed how Spotify was populating its playlists with music from fictitious artists. These artists, often portrayed with elaborate backstories, were actually creations of a small group of Swedish producers, primarily men, who churned out music under hundreds of pseudonyms. These producers were incentivized to mass-produce songs at lower royalty rates in exchange for prominent placement on Spotify’s highly influential playlists, effectively guaranteeing massive exposure. This strategy seemingly allowed Spotify to cut costs on music licensing, while disadvantaging legitimate artists who were edged out of playlist spots and lost out on potential revenue and audience reach. DN also uncovered a potential conflict of interest, revealing close business ties between the head of Spotify’s playlist initiative and one of the major labels behind these fake artists. However, the precise internal mechanisms within Spotify that facilitated this influx of low-cost music remained unknown at the time.
New insights into Spotify’s practices have now surfaced, thanks to forthcoming book, ”Mood Machine: The Rise of Spotify and the Costs of the Perfect Playlist,” by journalist Liz Pelly. An excerpt published in Harper’s Magazine details Spotify’s systematic approach to prioritizing cheap, pseudonymous music over tracks from established artists. This practice, internally dubbed ”Perfect Fit Content” (PFC), originated in 2017, a year before Spotify’s IPO, when the company was under pressure to improve its profitability. PFC was presented internally as ”music commissioned to fit a specific playlist or mood, with higher margins”—essentially, a way to pay artists less. The music editors curating playlists were already provided with extensive data on listener behavior, such as how often songs were played or skipped. With PFC, a new metric was introduced: the proportion of PFC music within their playlists. The higher the percentage, the better, according to the book. This created a clear incentive for editors to prioritize these tracks, even if they compromised the quality or authenticity of the playlists.
According to sources cited in Pelly’s book, not all Spotify music editors were comfortable with this system. Many were passionate music enthusiasts who prioritized artistic merit and authenticity over cost-cutting measures. However, the pressure to incorporate PFC tracks reportedly led to the recruitment of new editors who were less concerned about such ethical considerations. Eventually, the PFC program and its associated playlists were consolidated under a dedicated department called Strategic Programming (StraP), comprising around ten employees. This centralization further solidified the emphasis on cost-effective music and streamlined its integration into Spotify’s most visible playlists.
Spotify has refuted the allegations presented in the book, denying that editors were pressured to include PFC music or that the company deliberately hired editors indifferent to the practice. They also deny any connection between the former Spotify executive’s relationship with the fake artist label and the prominence of those artists on playlists. However, the book cites internal communications where editors were explicitly encouraged to utilize PFC tracks, directly contradicting Spotify’s claims. When contacted for comment, Spotify provided a generic written statement that did not address the specific details of the allegations. They emphasized that all music on the platform, including PFC, is licensed from rights holders and that no licensing agreements guarantee playlist placement. This response sidesteps the core issue of how internal incentives and metrics prioritize lower-cost music, potentially displacing legitimate artists.
Within Spotify, the PFC program seemingly raised internal concerns. An employee reportedly questioned how many plays these tracks were ”stealing” from real artists within internal chat logs. This kind of internal dissent likely contributed to Spotify’s efforts to keep the entire operation shrouded in secrecy. The fabricated artist profiles and their accompanying narratives served as a smokescreen, obscuring the systematic cost-cutting strategy that treated music as a commodity, akin to toilet paper. This entire operation, from the creation of fake artists to their preferential placement on playlists, raises serious questions about Spotify’s commitment to fair artist compensation and the overall transparency of its curation process.
The revelations in Pelly’s book provide a critical examination of the inner workings of Spotify’s playlist ecosystem. The emphasis on cost optimization, exemplified by the PFC program, appears to have prioritized profits over artistic integrity. While Spotify denies any wrongdoing, the book’s evidence suggests a deliberate strategy to favor inexpensive music, potentially undermining the earning potential and visibility of independent artists while simultaneously misleading listeners about the true origin and nature of the music they consume. This practice raises broader concerns about the power dynamics within the streaming music industry and the potential for platforms like Spotify to manipulate listener behavior and unfairly influence the success of artists.
