Spotify — which pays artists about $0.003 to $0.005 every time someone streams their song on the platform — allegedly claimed its playlists of songs from so-called "ghost artists" to cut costs in royalty and increase their income.
According to a report from Harper's Magazine stemming from a multi-year investigation, Spotify has partnered with so-called "web" production companies to add songs to its playlists in genres such as jazz, lo- fi hip-hop, ambient, and classical. Since 2017, these companies have been creating music called "Perfect Fit Content" (or PFC) that is shared through hundreds of "artist profiles," making it cheaper to play on Spotify's platform because it no longer have to pay royalties to external artists when PFC songs are streamed.
Spotify playlists like “Ambient Relaxation,” “Cocktail Jazz,” and “Bossa Nova Dinner” are now almost entirely PFC music, and thousands of PFC tracks have been streamed millions of times. A striking example from the Harper's Magazine article shows a production company in Spotify's country, Sweden, with 20 songwriters behind the work of more than 500 "artists." In the Spotify app, the artist profiles of PFC tracks are often empty, contain vague information when searched, or in some cases, show a completely fake bio.
In the modern music industry, which is primarily driven by a streaming-driven revenue model, the proliferation of "ghost artists" and PFC music can cause great harm to working musicians, who no longer earn anything from streaming. For example, Spotify CEO Daniel Ek has sold about $345 million USD of his personal stock since July 2023, an amount that an artist would need to reach through 115 billion streams in a year to earn . That's 15 billion more streams than Drake, Spotify's most streamed artist of all time, has achieved since first releasing music on the platform more than a decade ago.
For an example of what a working musician earns from a platform like Spotify, Takuya Kuroda, a trumpeter with approximately 157,000 monthly listeners, and his most popular song, a smooth reimagination of “Everybody Loves the Sunshine” by Roy Ayers, has been streamed 25 million times in 10 years. This number of streams equates to approximately $59,500 USD — or more than $5,000 USD per year — before management, label, and distribution commissions.
Spotify has denied these allegations, calling them "categorically untrue, full stop." However, according to the report, several Spotify playlist editors have left the company due to disagreements over the concept, and have been replaced by editors who are more open to the PFC model. "If the metrics increase, why don't we add more, because if the user doesn't notice, it's okay," according to an editor. In June, Ek also tweeted that "creating content" is almost "costless."
