Spotify's fake artists to get around royalties

The war between artists and streaming platforms has been going on for years: from Kanye West's STEMPLAYER to Jay-Z's Tidal, the major artists of the jet set have repeatedly tried to subvert the rules of the music industry by creating independent realities where they let fans experience their music on their terms. «Today artists only get 12% of the money earned by the industry, it is time to liberate music from this oppressive system. It's time to take control and build our own», Ye declared at the release of Donda 2 last February, after turning down a $100 million contract with Apple Music. Yet it seems that interest rates are not the only reason why artists should resent Spotify. The scandal, casually brought back into the news by a TikTok by @dritzbitz that went viral in which he tried to search the web for ambient artists that went viral without finding any hits on the web, dates back to two summers ago, when Music Business Worldwide published a case study on 50 musicians believed to be fictitious and who were speculated to play a key role in a 'savings scheme' by Spotify. Rollingstone reported that names such as Ana Olgica, Charles Bolt, and Samuel Lindon, at the top of playlists such as Deep Focus, Sleep, or Peaceful Piano with millions of streams, were pseudonyms attributed to tracks created by multiple composers (or a single composer) under the jurisdiction of Epidemic Sound, an equally fictitious Swedish 'music production company. Now the question arises: why would Spotify create tracks and artists and put them on top-rated playlists? What is the purpose and what is the profit? Some kind of rogue tax evasion. 

The world's top-rated music streaming company does indeed pay royalties, which we might simplify to define as the fee that is paid to the person who sells the marketing and exploitation rights of a given product or service (the artist) on a proportional basis. In practice, the company divides the total payment between all the artists on the platform according to their portion of the total streams, with the practice of fictional artists Spotify would therefore pay a much lower royalty rate than to tracks by 'real artists' vying for the same places in the playlists. A theory confirmed by a former company insider who confirmed to Variety that the strategy is just one of 'many internal initiatives to reduce the royalties Spotify pays to the majors'. A closer look at the case has also disproved all those who suggested that the total amount of streams accumulated by these artists were not voluminous enough to have a real impact on Spotify's expenses. In 2017, the 50 'fake artists' identified by MBW totalized around 520 million streams, so if we consider that, not counting publishing royalties, Spotify's standard estimate of payment to rights holders for recorded music per stream is around $0.004, Spotify would have saved $2.08 million. 

In reality, the problem is not simply about the company's lack of transparency in tax matters, it is also and above all about how these economic games affect the music we listen to, as well as the artists' careers and income. Not only does the playlist system allow the number of streams to increase exponentially based on a piloted algorithm, but so do the charts that exclude 'real' artists who are supposed to take the place of fictitious ones for the same number of streams. The root of the problem is partly the increasingly passive nature of our daily music consumption. People often ask Alexa, or another digital assistant, to find background music for a specific task: study, workout, relaxation, even sleep, or they rely on a playlist designed for the purpose, without paying much attention to the artists or song titles, and this creates an opportunity for abuse: with artificial intelligence making the decisions, everything can be hidden in the algorithm.