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 continued,
“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 parties.
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.