“Watered-down beer” — that’s how one U.K. record executive describes Spotify’s alleged practice of sprinkling in “work-for-hire” production music amidst some of its most popular playlists, as Music Business Worldwide continues to level accusations that the world’s most popular streaming service is gaming its own system.
The accusations stem from the site’s alleged practice of padding its playlists with music created by producers operating under false names — for which it allegedly pays a flat fee and does not pay out royalties. (It should be noted that this is a common practice in the worlds of background music and advertising.) Spotify has soundly denied the accusations, but MBW and several Variety sources insist that they are real.
The latest development concerns the Swedish music-production house Epidemic Sound, which MBW touts as contributing even more phantom tracks than the Stockholm-based UMPG-repped producer duo of Andreas Romduane and Josef Svedlund (Quiz & Laross).
Epidemic composers Jeff Bright Jr., Greg Barley, Lo Mimieux, Charlie Key, Amity Cadet, Benny Treskow and Mia Strass are all cited as having ties to many of the pseudonyms represented on MBW’s list of 50 “questionable” artists widely represented (and, in many cases, praised) on Spotify’s classical, ambient and smooth jazz/new age playlists. Others who appear to be Epidemic artists include Tonie Green, Sigimun, Julius Aston and Grobert, filtered in with real-life Epidemic Sound composers Peter Sandberg, Gavin Luke and Rannar Sillard.
In its own words, Epidemic commissions “work-for-hire” music from its clients, acquiring “all financial rights” in the process, meaning it pays out no royalties for these compositions.
“There is no shortage of these production music houses that deliver tailor-made content for a set fee,” says one indie music publisher. “They’re the new version of Muzak.”
The watering-down metaphor applies to how Spotify pays out its royalties, by “pooling every stream on its platform” and compensating based on a total percentage of plays across the board, with the most streamed obviously making the largest share of the payouts. As mentioned before, that method lowers the total royalty compensation to high-royalty artists and labels which provide the bulk of Spotify’s top-performing content — and streams. As MBW points out, playlists like “Deep Sleep,” designed to help a listener count sheep, can continue to play for hours on end, racking up plays and royalty payments.
A system whereby certain top-performing artists and tracks were paid a flat fee, rather than steadily increasing royalties, would save the service a significant amount of money.