Spotify is under scrutiny (again) following revelations in a new book that accuse the streaming giant of promoting so-called "ghost artists" to reduce royalty payments to legitimate musicians. The claims, outlined in Liz Pelly's Mood Machine: The Rise of Spotify and the Costs of the Perfect Playlist, suggest the platform has engaged in practices prioritising low-cost, generic music over works from established artists.
The book, excerpted in Harper’s, alleges Spotify implemented a program called “Perfect Fit Content” (PFC), which involved creating stock-like music through affiliated production companies. These tracks were then integrated into the platform’s curated playlists, allegedly to increase the share of streams going to music that costs Spotify less to host.
“In doing so, they are effectively working to grow the percentage of total streams of music that is cheaper for the platform,” Pelly wrote.
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Inside the PFC Program
Launched in the mid-2010s and reportedly becoming a major initiative by 2017, the PFC program included tools for Spotify playlist editors to track how commissioned tracks performed. A former Spotify employee detailed how a new column appeared on internal dashboards, measuring metrics like plays, skips, and how playlists aligned with the “improved margins” of PFC tracks.
“Initially, they would give us links to stuff, like, 'Oh, it’s no pressure for you to add it, but if you can, that would be great," the ex-Spotify employee told Pelly. "Then it became more aggressive, like, 'Oh, this is the style of music in your playlist, if you try it and it works, then why not?'
As skepticism about the program grew among existing employees, the company allegedly hired new staff less concerned about its ethical implications. By 2023, PFC tracks dominated more than 150 playlists, including popular mood-based lists such as “Deep Focus” and “Morning Stretch.”
Musicians Speak Out
One musician who contributed to a PFC partner firm as an ambient composer shared their disillusionment. Offered a modest upfront fee and no ownership of their tracks’ master rights, the musician later discovered their compositions were amassing millions of streams, released under aliases on Spotify.
“I’m selling my intellectual property for essentially peanuts,” they told Pelly.
Critics argue that Spotify’s reliance on PFC tracks undermines the already minimal royalties paid to artists. Despite these claims, Spotify has denied creating music in-house. In 2017, the company called such accusations “categorically untrue,” and CEO Daniel Ek recently described the cost of creating content as being “close to zero.”
Spotify has not publicly commented on the new allegations. Meanwhile, concerns over how these practices impact musicians highlight ongoing tensions in the streaming era’s music economy. Earlier this year, Spotify’s Co-President Gustav Söderström said that AI-generated music would have a place on the platform, but the company has no plans to create one itself.
"If creators are using these technologies and are successful, we should let people listen to them," said Söderström. "We’re a tool for creators, and if creators want to use AI to enhance their music, as long as we follow the legislation and copyright laws, we want them to be able to monetise their music and pay out."
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