Music journalist Liz Pelly’s passionate, exhaustive excoriation of Spotify, Mood Machine, isn’t just an invective against music streaming. It’s also another cautionary tale about how tech behemoths and hyper-capitalists have built unprecedented fortunes at the expense of users and artists, utilizing utopian language and genuine goodwill to obfuscate what Pelly refers to as “music business as usual”.
Some of this business as usual had already been settled, suggesting that Spotify’s business model bears further scrutiny. Consider Spotify’s Discovery Mode, a controversial program that allows musicians to promote their music by receiving diminished royalties. Discovery Mode has been criticized by the Recording Academy, the Future of Music Coalition, and others as a new form of Payola, where record labels paid radio stations to play a single they were promoting without disclosing the sponsorship. The Federal Communications Commission (FCC) deemed this practice illegal in 2007.
This practice on Spotify’s part directly contradicts Discovery Mode’s mission statement of helping smaller and independent artists compete against the Major Labels, as many smaller artists can’t afford to make do with lower royalty payments. Once you notice this hairline fracture in the streaming music industry, Spotify’s entire edifice begins to crumble, revealing how predatory capitalist practices are made palatable to consumers with companies’ lofty ideals and slick corporate HR speak.
Allowing independent artists to compete against the Majors is one of the cornerstones of Spotify’s myth, which Pelly takes down the hardest. When detailing how Spotify managed to leverage itself from a scrappy tech startup to a multi-national juggernaut, Pelly reveals how Spotify offered sweetheart deals to Sony, Universal Music Group, and Warner, who own the rights to over 70 percent of recorded music. Those deals only got sweeter as time passed, further entrenching the majority’s control while diminishing independent musicians’ power. Another myth is shattered. A pattern has emerged.
Prioritizing Major Labels over smaller and independent artists might be excused as more business as usual, but Pelly unpacks several more alarming practices at Spotify that speak to a more sinister and willful disenfranchisement. The first is the rise of “ghost artists”, which is generic-sounding background music, or “Muzak”, commissioned by Spotify, which steers users due to lower royalty rates.
The second, and most damning, is the recent reorganization of how Spotify royalties are paid. Under this new restructuring, any song that receives less than 1,000 streams in the pay period is classified as a “hobbyist/amateur” and thus ineligible to receive royalties. To make matters worse, Spotify deems field recordings ineligible for royalty payments, citing white noise and other sound effects playlists and claiming they’re an attempt to game the system.
While there’s certainly no shortage of shady playlist hacking, this also leaves important cultural institutions in the lurch. For example, legendary folk music resource Smithsonian’s Folkways Records can’t receive royalties for their oddly successful Sounds of North American Frogs LP under the new payment structure. Combine this with Spotify’s “pro-rata” system, where artists aren’t paid per stream but instead earn a share of the company’s profits based on their percentage of shares of overall streams, and it becomes explicit. Spotify allows the Major Labels – and themselves – to enrich themselves on the unpaid labor of independent musicians.
This unfair music industry practice speaks to the larger problem of viewing music as a product. In the last few years, Spotify pivoted hard away from the curatorial/playlist model of the 2010s, which made the platform excellent for discovering new music. Now, Spotify pushes “lean-back listening”, which is geared toward passive listeners. Indeed, Spotify has adopted Meta/YouTube/TikTok’s “more screen time = more income” policies.
Mood Machine is more than a screed or political pandemic, although Pelly is clear and direct about her issues with the current music streaming model. It’s not all doom and gloom, either, although much of the book makes for rather upsetting reading. Pelly focuses on solutions, drawing attention to the United Musicians and Associated Workers (UMAW) “Justice At Spotify” campaign and the Music Worker Alliance’s #StreamingJustice initiative.
Pelly also shares some intriguing human interest stories, like Congresswoman Rashida Tlaib taking an interest in the rights of streaming musicians due to her Detroit roots. Tlaib would propose the “Living Wages for Musicians Act” in March 2024, which promises to radically re-organize the current royalty system, moving beyond “pro-rata” to direct payments to the artists and raising the rates to a penny a stream. It remains to be seen if this bill will pass, but it’s a sign that there are alternatives.
While Mood Machine is an exhaustive investigation into how streaming currently operates, it’s also a searing indictment of global capital in the Digital Age. While Spotify is paying its artists .0035 cents per stream, Spotify’s C.E.O. Daniel Ek cashed out $349 million in stock options in 2023. Meanwhile, according to Pelly, Spotify invests hundreds of thousands of dollars in Times Square billboards that benefit their artists’ egos more than their pocketbooks. Spotify is also involved in military-grade AI, like the company EK, which uses funds earned from Spotify to invest €100 million in the German military AI company Helsing. Hesling uses live data to identify and assess multiple collected forms of data via sensors to assemble a picturesque viewpoint which military agents could then use at their discretion. Instead of prioritizing the needs of the many, Spotify enriches a select few.
Mood Machine is a masterful, in-depth examination of the music streaming industry and how it got to be this way. Pelly’s authoritative investigative journalism makes sense of a vast, sprawling topic spanning decades, which she makes not only understandable and compelling but often entertaining. While it may get mired down, at times, with minutiae and royalty rights, making it more likely to appeal to copyright scholars than casual Spotify listeners, this work makes an indisputable claim about the risks the current streaming model poses to musicians and the music industry. Anyone who cares about the future of music, art, and creativity would do well to learn what Mood Machine has to say.