Just last week, Spotify was accused of defrauding its stream numbers and underpaying
artists by placing “fake artists” in highly-streamed
playlists — effectively limiting the opportunities for other
artists to make money and gain exposure.
The report, originally published by Vulture, claimed that the streaming service
put said artists’ songs onto its premium curated playlists,
ones like “Deep Sleep” or “Peaceful Piano” which in turn
allowed the company to cut corners on writing checks to other
artists. These tracks reportedly hit over 500 million
streams, which, by Spotify’s royalty rates, saved the streaming
giant about $3 million.
In a quick turnaround, the streaming service denied the allegations, a spokesperson for
the company stating,
“We do not and have never created ‘fake’ artists and put them
on Spotify playlists. Categorically untrue, full stop. We pay
royalties — sound and publishing — for all tracks on Spotify,
and for everything we playlist. We do not own rights, we’re
not a label, all our music is licensed from rightsholders and
we pay them — we don’t pay ourselves.”
Following the denial of these specific allegations, concern has
also arisen regarding how fairly the service is paying its
artists via royalty rates.
Peter Sandberg, a 27-year-old composer in Sweden, who creates
tracks for Spotify playlists under various pseudonyms (which he
has not revealed) has recently come forward discussing his take
on his work with the company. In an interview
with The New York Times, Sandberg
stated that using the term “fake” is not justifiable. He
“I’m a composer trying to find a way to grow and spread my
work,” he wrote via email. “And to be called fake is not
something I appreciate.”
Sandberg is represented by Epidemic Sound, a Swedish company
that makes background music for television shows, films, as
well as YouTube and Facebook videos and has worked alongside
pop stars like Kelly Clarkson in the past. The entity uses
European venture capital firm Creandum as an investor — as does
Spotify. Sandberg continued in the interview that his
compensation was just fine.
Spotify’s global head of strategic initiatives, Jonathan
Prince, says the streaming giant uses Epidemic’s library
because of the demand of their mood-based playlists like
“Peaceful Piano,” a playlist which has 2.9 million followers.
“We’ve found a need for content,” Sandberg said in a
recent interview. “We work with people who are interested in
producing it,” apparently Epidemic Sound is just one of those
While it remains to be know how much lower the royalty
rate is for these type of tracks, it seems to hold
a different degree of an issue from artist to artist.
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