Spotify is making its own records… and putting them on playlists


Last week, MBW revealed that Spotify was out of contract with all three major labels – and locked in a tense dispute over the 55% revenue share it pays recorded music rights-holders.

In the same story, we told you that the Swedish company was now willing to negotiate over premium-only content as part of new deals.

And on Monday, we reported that Spotify had deliberately blackballed Katy Perry’s Apple-exclusive comeback single on its biggest playlists – a decision which had a material impact on the track’s disappointing performance worldwide.

Today, MBW brings news that, for some, will be more surprising than any of that.

Spotify is starting to make its own records.

Multiple cast-iron sources have informed us that, in recent months, Daniel Ek’s company has been paying producers to create tracks within specific musical guidelines.

We’re also hearing that these producers receive a flat fee for their work, in addition to studio and musician expenses – but Spotify holds on to the master copyright. (Publishing rights, we understand, may be up for grabs.)

The subsequent tracks appear on Spotify under fake artist names.

These fake artists are credited on Spotify with owning their own master rights.

But they don’t. Because they’re made-up people.

Screen Shot 2016-08-31 at 18.25.08MBW understands that Spotify is instructing producers to create tracks – typically without vocals – which fit certain genres and themes, including jazz, chill and peaceful piano playing.

Hmm. Why would Spotify be instructing producers to write and record tracks of this nature?

Bingo: to appear on some of its relaxing first-party playlists, which boast millions of followers between them.

MBW is 100% sure that these tracks exist. We’ve even heard some of them.

We promised our sources we wouldn’t tell you who the fake artist names are, so we won’t.

But we can tell you that we’re aware of five Spotify-owned tracks that each have more than 500,000 streams – and one with over a million.

“Even the majors don’t know about this,” one source told MBW.

“If they did, it would be bound to cause some interesting debate, especially during licensing negotiation time.”

Some perspective: these Spotify-funded recordings aren’t going to be troubling the pop charts anytime soon.

They also fit with an existing strategy at the streaming platform – that of creating its own original entertainment content.

Witness Spotify’s recent first-party documentary, Metallica: The Early Years, and its string of other Netflix-style original video programmes in the works.

MBW understands that Spotify feels a key reason to create these tracks is quality control: by making its own songs for ‘Chill’ playlists, for instance, it can curate musical blends exactly to its taste.

The Spotify-owned masters are seen internally as something of an experiment, rather than a large-scale disruption to the platform’s catalogue – which, remember, holds over 30 million licensed tracks.

In other words, Spotify’s not going to be trying to develop the next Drake anytime soon.

However, certain rights-holders – including independent rights-holders – make good money from having their tracks played on Spotify’s relaxing/piano/chill/jazz playlists.

They surely won’t be delighted to hear that the company is ousting their records on these playlists in favour of its own masters – especially when its own masters are capable of surpassing a million plays.

More conspiratorial minds might wonder what effect a larger-scale version of this strategy may have on Spotify’s overall payment to recorded rights-holders – and where on its playlist map the trend might go next.

Classical? Electronic? Blues? Dinner? Pop?

Spotify owns ‘Chill’ playlists with more than 700,000 followers; ‘Dinner’ playlists with more than 300,000 followers; and ‘Focus’ playlists (‘Peaceful Piano’) with almost 2 million followers.

From now on, none of them are the exclusive preserve of artist and label partners any longer.Music Business Worldwide

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    Spotify needs to be regulated. Or put out of business !

  • On Spotify some fitness playlists, like for running, have awfully shitty music on them. And I was like “what the f was that?”. Now I see.

  • Adam

    Going the Netflix route. Seems smart if they want to ever show a profit.

    Also, seems like the Apple PR machine is really out to get Spotify past few weeks with all the stories “leaking”. Guess they’re in the big leagues now.

  • creatorsfriend

    where there’s a hit there’s a writ or to put it more bluntly “if there is money to be made someone will try to make it”
    whats the big deal? it used to be British producers making covers of American Hits because they weren’t released in the UK.
    Mood music has always been made – what do you think Library music is?
    and as for Katy Perry? You don’t think that Apple have been doing this for years? Downgrading artists who go to radio first (the original windowing?).
    Capital Radio in the UK not playing artists who go “Day and Date” i.e. not letting radio have it first and therefore encouraging piracy
    This isn’t news
    and who said that sales charts are the modern measure of success? they are not.
    The times they are a changing but money always talks

  • It seems the industry ‘powers that be’ have once again found a way to cut artists out of the $$$ loop. And, this time pushing to make them obsolete!

  • Daniel Porter-Jones

    Evidence that Spotify really is in the market to drain money away from music. Further reason for the payment structure to change and subscription money only be distributed to artists who an individual subscriber has listened to rather than distributed unfairly between all artists.

  • Bastow

    These playlists are designed for such passive listening, i haven’t heard any of the Spotify created music, i suspect it isn’t terrible and in some instances, likely better than some of the officially released artists that exist. As stated, it’s not designed to cultivate the ‘next big thing’ and they’d be better focussed on investing in artists as a label in the way Netflix creates original programming… but with real actors and not faceless producers.

    It is a concern that if they were to flood the service with this type of made to measure music and garner the streams purported above, as ultimately it dilutes the payments going out to actual artists under the way Spotify calculates its payments. However, this would have to be some real flood for it to be felt.

    Either way, it’s not the most encouraging story and not the best PR for it to come out the way it has.

  • 8thEnder

    We already know that music is being devalued by the minute. This just serves that idea even more. One where music has now fully made its way to the other side of the spectrum there only to line the pockets of the corporations, not artists, not musicians. This has kind of always been the case, but the difference was that music was made from the heart. When someone from a corporation says “make a track within these guidelines…” How can it be true?! It’s forced. It will lack true emotion, and flood the markets with crap, while real artists disappear because they are not backed by the corporation. Instead of finding and developing talent, they’re finding people with a lack of morals to write music that Spotify couldn’t make themselves and taking almost every penny from it. Creating fake artists is a huge slap in the face to real artists that slave everyday to remain true to their art and passion. This is very similar to the ghostwriting bs in Dance Music.

    So, when and where does this end? How long till Spotify realize keeping all the ad revenue for themselves is the sure-fire way of staying in business, and this seeps into all genres of music?

    “The answer to your question is… Welcome to tomorrow.” – Megadeth

  • willbuckley

    “Now, if we could just get rid of those actors and directors.”. The Player

  • Ciara Lee

    Are we really surprised?

  • William A. Ferguson

    So how does one get a gig writing specifically-tailored music for Spotify?

    I’m asking for myself because that sounds like job security.

    • vintermann

      Write good music! There may be fake artists for all I know, but in Spotify’s genre playlists I have also found some extremely niche artists. One minimalist composer I found had with virtually zero plays on Spotify before being featured. And, knowing the style and genre, I bet he didn’t have very many plays outside of Spotify either.

      I checked, he’s a real guy, been self-publishing on cdbaby for more than a decade, over 20 albums… Spotify’s algorithms found it anyway.