Mood Machine – The Rise of Spotify and the Costs of the Perfect PLaylist

Author:Liz Pelly

The point at which art intersects with business has always been fraught, and Liz Pelly is unequivocal in that she observes “commercialism infecting creativity”. Described in the Washington Post as “the most lucid and rigorous critic of the rot at the heart of an apparently magical service” Pelly’s book is a 288 page diatribe that sees no redeeming features in the worlds biggest streaming service.

Across 30 chapters Pelly comes out swinging, and there are several times when she connects with deserving targets. She rightly lampoons founder Daniel Ek’s claims that he was a frustrated musician on a mission to save music. Ek wanted to find an online service that would build user engagement and become a vehicle to sell advertising. Music became the focus mostly because the file sizes were manageable. That he was able to is largely because record companies, slow, complacent and luddite, failed to figure any of this out for themselves. That’s enough for Pelly to go on to dismiss any redeeming narrative about how streaming has otherwise enabled music to survive and indeed prosper given the almost fatal impact illegal downloading had.

Another deserved target is Spotify’s Discovery Mode which offers algorithmic promotion (adding them to or pushing tracks higher up playlists) in exchange for a 30% lower royalty rate. The lack of transparency (to users at least) doesn’t sit easily alongside Ek’s claims to have democratised music. Pelly leans hard into parallels with payola, the 50’s financial kickbacks to radio stations later made illegal. Whilst there are similarities – Spotify don’t tell users which tracks are getting some extra help – Pelly gives short shrift to other post payola practices that were common place pre streaming – radio station playlists and record plugging, labels funding record store promotions or price cuts, or even labels buying their own records in shops that they knew returned numbers that were used to compile charts. It doesn’t excuse the opacity of Spotify’s practice but Pelly glosses over the fact that Discovery Mode isn’t the first questionable promotional tool the industry has seen since the 50’s.

However, elsewhere Pelly strains to build a case which damns other parts of Spotify’s business model. She does a remarkable amount of sleuthing into the “ghost” artists whose music seems to be most prevalent in playlists curated by Spotify to suit particular moods – bossa nova dinner, deep focus, ambient chill out, lo-fi dreams. She determines hundreds upon hundreds of tracks have been created by Spotify friendly companies to feed Spotify’s “Perfect Fit Content” programme – i.e. they are the absolute embodiment of the mood Spotify are trying to represent musically. Crucially these tracks are licensed at lower royalty rates, on the basis that the majority of listeners who use these playlists as background music and aren’t interested in who actually makes the tracks. Some of the tracks seem to have fake artists credentials, but rather than wonder why anyone bothered creating them, Pelly uses this to call them “fake artists” despite tracking down actual musicians who are paid to write and record “perfect fit” content. Given actual musicians recording music for actual record labels listened to be people looking for a vibe, not a particular performer was the extent of what was happening here Pelly is left railing against Spotify for “gaming the system against any musician who knew their worth”, and how it rides rough shod over cultural and “instrument traditions”. All I could hear was the sound of an argument being stretched gossamer thin and an unanswered question about what proportion of Spotify streams are actually notched to this “gaming”.

By far the biggest omission in the book is the voice of the Spotify user. Pelly is damning about Spotify’s use of so called “fake” artists but doesn’t find out if any users actually care. Pelly will argue that it’s because of Spotify’s deception, but there’s a deeper unexplored issue as to whether someone seeking a “Sunday Morning Coffee Shop” vibe gives two hoots about the CV of who they are listening to, or even if it’s actually an AI creation, which is clearly where we are heading. And that’s apart from users (or former users in my case) that never once used a mood playlist.

Spotify’s name will frequently preface a social media post along the lines that they pay artists a tiny amount, often given as just $0.0035 per stream. For a brief moment I was metaphorically high fiving Pelly as she points out these statements are wrong – they don’t pay per stream, and they don’t pay artists direct. There are two types of royalty – one for performers and one for the writers of the song. Her explanation of the model actually used for performers– very broadly speaking net revenue is divided among rights holders according to stream share, leaving labels to pay artists whatever they have agreed between themselves – is one of the best I’ve read. She makes a very worthwhile point that the lack of clarity around how the income streams work and the secrecy the labels insist upon (deals protected by legally binding non disclosure agreements) are an obvious barrier to a more balanced distribution of income. There’s a short discussion on the unfairness of the model adopted by most streamers of paying according to stream share, rather than the more artist friendly payment per stream. It’s obvious that this something very much wanted by the big 3 labels, so the discussion stops.

Although the money that streaming generates is at an all time high – Spotify paid rights holders a record £7.7bn in 2024 – Pelly’s condemnation is absolute. The number of private equity firms buying up back catalogues apparently evidences not value but “desperation@. Something I find hard to see in Neil Young, Queen, Pink Floyd et al. Pelly’s background is with grassroot musical collectives, which fall outside the 3 mainstream labels both pre and post streaming. There’s a struggle for representation even within independent labels who are increasingly encouraged to produce stream friendly music, and such is the co-dependence between the major labels and the streamers this group are certainly marginalised.

By the end of the book she’s laying out a way forward that references musical collectivism, the importance of independent musicians joining unions, and the UK Musicians Union advocacy for a universal basic income, which would ensure any artist would be free to pursue their vocation without compromise. I totally buy in to the logic of rejecting the mainstream streaming providers and creating a more balanced alternative but curiously, Bandcamp barely warrant a mention, and Pelly has nothing to say about why artist led streaming platforms like Tidal didn’t achieve a landslide of support.

Concentrating on Spotify and its capitalist surveillance” alone flaws this book because although some of her criticisms are valid, she doesn’t speak to the number of users who never use playlists or aren’t geared to her concept of “lean back listening”, or address the fact that are just 3 companies controlling 70% of the market, and de facto, the content on which Spotify relies for survival. Hopefully in her next book she’ll turn her fire on the monopoly that now really runs music, not just one of the companies that gives us access to it.

Length of Read:Medium

Might appeal to people who enjoyed…

Vinyl

One thing you’ve learned

Amazon Music isn’t really any better than Spotify although it wasn’t this book that told me that.

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