The Monetization of Apathy
a.k.a. A bitter truth about what people are listening to, and why.
Spotify has a fake artists problem. That’s not news. In fact, Music Business Worldwide first reported on the issue all the way back in 2016. (It wasn’t until a year later that the story really blew up, prompting Spotify to issue a fierce denial of the allegations and state, “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.”)
The story has continued to develop over the past five years, and despite the rash of negative attention thrown Spotify’s way, fake artists have continued to proliferate across all of the major streaming platforms. As detailed in another Music Business Worldwide story that dropped last month, it seems that much of the initial “fake artists” boom was not necessarily the direct work of Spotify, but something initiated by a group of small labels (many of them in Sweden) looking to game the streaming system. For instance, Swedish label Firefly Entertainment, which has managed to get its music placed on nearly 500 first-party Spotify playlists, has at least 830 fake artists on the platform, although it seems the the bulk of the music credited to them was created by as few as 20 songwriters, most of whom were presumably paid an upfront flat fee and / or a reduced royalty rate on the back end.
Why would Firefly do this? It’s a numbers game, where labels flood the zone with cheaply created music that’s been purposely designed to fit streaming platforms’ mood- and genre-based playlists (e.g. “music to chill out to”). If just a handful of songs land choice spots on popular playlists, they can generate millions—and even billions—of streams, bringing in lots of income to the commissioning label, which doesn’t have then split those profits with artists at the usual rate. (On a related note, there’s also an entire ecosystem of spammers working to exploit streaming platforms’ search algorithms for profit, often by creating misleading or flat-out generic artist names.)
These practices may be morally questionable (and that’s being kind), but they’ve also been lucrative for at least some industry actors, which is why the major labels have also gotten in on the act. Rolling Stone reported back in 2019 that Sony had adopted an “if you can’t beat them, join them” approach, creating its own fake artists and racking up billions of streams in the process. And according to another recent Music Business Worldwide story—which admittedly consists of a list of allegations (some of them unproven) from an anonymous reader who claims to “have a pretty extensive background in the music business working for both rightsholders and retailers”—the practice has only grown since then, with the likes of Warner and Universal joining in.
As music industry schemes go, these streaming manipulations do feel particularly depressing. Although music has always been plagued by nefarious actors looking to game the system, what’s happening now is more surgical than the corrupt practices of old. Writer Ted Gioia discussed the topic in the most recent edition of his Honest Broker newsletter, and said the following:
This kind of scam wasn’t possible before streaming. People obviously listened to music while studying or working, but they either picked out the record themselves, or relied on a radio station to make the choice. Radio stations were sometimes guilty of taking payola, but even in those instances a human being could be held accountable. But with AI now making the decisions, everything can be hidden away in the code.
Spotify didn’t invent passive listening, as anyone who’s encountered a “lite rock less talk” radio station can attest. Streaming has, however, accelerated the rise of passive listening, and in the process has exposed (and capitalized on) an ugly truth that diehard music fans will likely find hard to swallow: most people really don’t give a shit about what they’re listening to.