Ever get the feeling you’ve been cheated?
That classic line, delivered by Johnny Rotten in January 1978 during The Sex Pistols’ farewell show at San Francisco’s Winterland Ballroom, remains the stuff of legend. The frontman appeared to hint that the Pistols – for many, the purest distillation of the punk aesthetic – may have been flirting with artifice all along.
Fast-forward to the streaming-dominated music industry of 2019, and Rotten’s pugnacious kiss-off doesn’t only sound depressingly prophetic – it’s actually become a business model. Two summers ago, Music Business Worldwide ran a report on “fake artists” appearing on Spotify, which caused ripples across the global music industry. The exposé listed 50 artists we suspected were fictional, and who, it was speculated, were playing a key role in a money-saving exercise by Spotify.
There were a number of suspicious elements to these acts. Each had only uploaded a handful of songs to their profile, all of which achieved very prevalent placings in first-party Spotify “mood” or “activity” playlists – such as Deep Focus, Sleep or Peaceful Piano, which count millions of followers on the platform. Yet the same acts barely had any other internet presence – including zero social media credentials – and their names did not appear on any other music services (save for fans of their music ripping their songs off Spotify and uploading them to YouTube).
The hypothesis, later confirmed, was that many of these artists were, in fact, “fake” (i.e. pseudonymous) names attributed to tracks created by composers signed to Epidemic Sound, a Swedish “production music” house. The unproven inkling amongst major music labels was, and remains, that Spotify pays a lower royalty rate for these songs than it does for tracks from “real artists” vying for the same playlist spots.
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Why? Because Spotify pays out royalties on a pro rata basis. This means – as explained on Rolling Stone previously – that the firm divides its total industry payout across the entirety of artists on its platform, based on their portion of overall streams. The important bit: if “fake artists” are paid lower contractual royalty rates than “real” acts, and then, driven by playlist inclusion, claim a certain percentage of Spotify’s total monthly streams, Spotify ends up keeping more money. An ex-Spotify insider was once quoted by Variety as suggesting that this was a deliberate company strategy: “It’s one of a number of internal initiatives to lower the royalties [Spotify is] paying to the major labels,” they said.
When MBW’s story broke, some dismissed the importance of “fake artists” to Spotify’s economic status, suggesting that the total amount of streams accumulated by these acts wasn’t large enough to have a material impact on the firm’s bottom line. In 2017, the 50 “fake artists” outed by MBW – a snapshot of the total number on the platform – had a total stream count of approximately 520 million plays.
How time flies. In the nearly two years since that initial report, those same 50 “fake artists” have done rather well, racking up 2.85 billion Spotify streams between them to date. Indeed, the ten names listed below have cumulatively attracted more than a billion Spotify plays (1.22 billion) alone:
- ‘Ana Olgica’ – 154 million plays, 1.52 million monthly listeners;
- ‘Charles Bolt’ – 143 million plays, 1.85 million monthly listeners;
- ‘Samuel Lindon’ – 145 million plays, 1.55 million monthly listeners;
- ‘Aaron Lansing’ – 121 million plays, 1.62 million monthly listeners;
- ‘Enno Aare’ – 120 million plays; 1.15 million monthly listeners;
- ‘Piotr Miteska’ – 115 million plays; 1.47 million monthly listeners;
- ‘They Dream By Day’ – 108 million plays; 1.24 million monthly listeners
- ‘Lo Mimieux’ – 107 million plays, 1.28 million monthly listeners;
- ‘Karin Borg’ – 104 million plays, 987,000 monthly listeners;
- ‘Jozef Gatysik’ – 98.8 million plays, 966,000 monthly listeners;
These numbers actually downplay the real total, having been obtained from Spotify’s public-facing artist information, which only displays streaming data for up to 10 tracks per act. (Most of the above artists have six or fewer tracks available on Spotify.) Don’t forget, it’s possible that all of the music attributed to the names above is, behind the scenes, actually written and/or performed by the same person. To put the enormity of “fake artist” popularity into context, acts whose entire catalogs have fewer chart-eligible Spotify streams than 1.22 billion include: Beyoncé, John Legend, One Direction, Childish Gambino, Lorde and Meek Mill.
How much are the streams racked up by the 10 “fake artists” above worth to Spotify? Not counting publishing royalties, the industry standard estimation of Spotify’s payout to recorded music rightsholders, per-stream, is around $0.004. With 1.22 billion plays at that rate, Spotify would typically have had to shell our circa $4.9 million to record labels and ‘non-fake’ artists.
The significance of “fake artists” on Spotify doesn’t stop at the commercial numbers, either. As previously reported, the service is set to renegotiate its global deals with the three major music rightsholders (Universal, Sony and Warner) over the course of 2019. The knowledge that Spotify is willing to “bump” major label artists from some of its powerful first-party “mood” and “activity” playlists – replacing them with faker, potentially cheaper, alternatives – is, prospectively, a useful stick with which to beat the majors during these talks.
Interestingly, now the large record companies – who have been complaining about the “fake artist” practice for two years – might be adopting a “if you can’t beat ’em, join ’em” approach. Playlisting expert Kieron Donoghue recently spotted that Sony Music had launched a suspicious “mood” playlist on Spotify and Apple Music – “Sleep & Mindfulness Thunderstorms” – via the company’s Filtr brand. On Spotify, “Sleep & Mindfulness Thunderstorms” contains over 990 tracks, adding up to more than 18 hours of audio, mainly consisting of continuous storm sounds chopped into minute-long consecutive segments.
Nearly all of these tracks are credited to an artist called “Sleepy John,” who, it transpires, is actually a composer named David Tarrodi, signed to Epidemic Sound-esque production music house, Yellowtone. A glance at Sleepy John’s profile on Spotify shows that his top ten biggest “tracks” (literally all recordings or interpretations of the sound of falling rain) have jointly racked up over four million plays on the service to date. (Spotify, Sony Music and Epidemic Sound all declined to comment on this story.)
Darren Hemmings, founder of digital marketing agency Motive Unknown, discovered the true identity of “Sleepy John” online, before sketching out how he believes Sony is able to make decent money from ‘Sleep & Mindfulness Thunderstorms’. For starters, the likes of Spotify and Apple Music register a payout for any track, regardless of its length, so long as the listener has heard it for more than 30 seconds. This renders a continuous storm sound – with its “tracks” sliced up into as many minute-long portions as possible – as a smart, if soulless, money-minded strategy. What’s more, “Sleep & Mindfulness Thunderstorms” carries a title which has been carefully calibrated for search optimization, while it also lends itself to elongated listening activity (someone trying to nod off to sleep, for example).
Hemmings summed up Sony’s strategy with distinct annoyance. “So in short: calibrate songs for maximum revenue, leverage your playlist brand to push these f—king *everywhere*, support it with ads and boom – watch the money roll in,” he said. “Behold the music industry in 2019, ladies and gentlemen.”
Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis and jobs since 2015. He writes a weekly column for “Rolling Stone.”