Spotify responds to stream padding and fraud allegations
A headline this week made waves in the rapidly evolving streaming industry when Vulture claimed Spotify has been paying producers upfront for their services whilst placing fake artist alias’ on premium playlists to maximize profit for the streaming service and minimize artist payouts.
The article written by Adam K. Raymond included the following allegation: “This upfront payment saves the company from writing fat streaming checks that come with that plum playlist placement, but tricks listeners into thinking the artists actually exist and limits the opportunities for real music-makers to make money.”
A Spotify spokesperson has denied the allegations in an email to Billboard, saying:
“We do not and have never created ‘fake’ artists and put them on Spotify playlists. Categorically untrue, full stop. We pay royalties — sound and publishing — for all tracks on Spotify, and for everything we playlist. We do not own rights, we’re not a label, all our music is licensed from rightsholders and we pay them — we don’t pay ourselves.”
In response to Raymond categorizing Spotify individuals gaming the system, the spokesperson said the following, “As we grow there will always be people who try to game the system. We have a team in place to constantly monitor the service to flag any activity that could be seen as fraudulent or misleading to our users.”
Raymond has since revealed he cited an article from 2016 published on Music Business Worldwide for background on Spotify’s practice. According to his article, Spotify did not initially respond to his questions about the allegation.