Image of cover of book Mood Machine by Liz Pelly, reviewed by Naomi Manuell in the Newtown Review of Books.

Liz Pelly’s analysis of music streaming giant Spotify and its impact on independent artists is both fascinating and disturbing.

Since its beginnings in 2006, Spotify has grown into the largest provider of music streaming in the world. For almost the last decade, music writer Liz Pelly has been investigating the company, her initial interest sparked by how major record labels were influencing Spotify playlists. Since then, she has interviewed over 100 sources, roughly one-third of whom are former Spotify employees or industry insiders. Mood Machine is the result.

For many users, Spotify exemplifies the idea of ‘frictionless listening’, a convenient platform delivering what seems like an infinite library of every song ever recorded. But Pelly wants her readers to press ‘pause’ and consider the broader implications of an endlessly flowing stream of music, not just for consumers but also the artists, composers and other professionals working in the recording industry.

I’ve been driven by a deep impulse toward demystification – toward shedding light on the inner workings of streaming companies and debunking the myths they perpetuate. Sometimes it feels more complicated and convoluted than I could ever have imagined. Other times it all just feels like music industry business as usual. The truth is somewhere in the middle: the story of streaming is as much about what’s changed as it is about what’s stayed the same.

The Swedish start-up arrived when the effects of music piracy via peer-to-peer file sharing was being felt acutely. Sweden, in particular, was seen by the record industry as a lost market. High-quality broadband made it easy for Swedes to use file sharing applications like Napster to get their music for free. And while there were anti-piracy laws in place, Sweden’s strong privacy legislation made it almost impossible to identify offenders. Meanwhile, record companies were already looking at digital technology for solutions.

In some ways the music industry has been preparing for that moment for years. Even in those pre-Spotify years, there was already a semi-universal acceptance among some major label executives that music was becoming a more ubiquitous commodity. Industry insiders had long been predicting the imminent arrival of what they then called ‘the celestial jukebox’, where all the songs in the world would be stored in the cloud somewhere.

Enter Daniel Ek and Martin Lorentzon, Spotify’s co-founders. While Spotify’s story of scrappy start-up to streaming behemoth has been recounted by other authors, Pelly highlights that the founders’ mission was less about ‘saving’ the recording industry and more a matter of exploiting a business opportunity.  

In the story of Spotify is the story of a broken music industry desperate to keep existing after the era of digitally enabled file sharing … It is the story of the twenty-first century’s overeager and opportunistic tech solutionists, of billionaires and their overhyped machine, looking around for problems to solve, arrogantly disregarding the social problems left in their wake. It’s a story of listening being sold more as a utility than as an art form, and musicians starting to see themselves more as content creators that artists.

Pelly’s critique highlights how, in its infancy, the music streaming on Spotify was no more than a ‘traffic source for its advertising product’. On the other hand, once the company established its subscription model, it became adept at changing direction. Early on, the company sold the idea of searchability as music-literate early adopters tracked down artists and curated their own niche playlists. But growing the business meant moving beyond this relatively small group of discerning listeners.

Around 2012, the company commissioned a study into people’s listening habits. They discovered people listened to music across a range of ‘moments’ in each day from cleaning the house to dancing at a party – and even falling asleep. Music in these moments played a range of roles, both functional and emotional. Spotify then broke each of these ‘moments’ into their own distinct markets. The biggest market, unsurprisingly, was people using music as a ‘background experience’.  Once the company realised users preferred to ‘lean back’ and let Spotify choose their music according to their moods, a strategic shift was underway. Spotify was now in the business of providing the soundtrack for every moment in a user’s life.

In the streaming era, the industry had identified a new type of target consumer: the lean back listener, who was less concerned with seeking out artists and albums and was happy to simply double click on a playlist for focusing, working out, or winding down. In this environment, what it meant to have a ‘hit’ was changing: it didn’t necessarily mean a mainstream breakthrough, but a viral streaming moment, or a data-driven playlist-ladder climb.

Where user-generated playlists had previously dominated the platform, Spotify took more control of the listening experience and hired its first playlist editors. But Pelly notes that playlists don’t just respond to users’ musical interests, they can manufacture them as well. Spotify’s early mythmaking, as Pelly puts it, was around the ways it would abolish the ‘gatekeeper power’ held by radio with the idea that the data-driven success (of any given song) would be a meritocracy empowering fans to ‘nominate pop stars to power’. But Pelly says the company simply became a different kind of gatekeeper and that the new system was just as influenced by contracts with major record companies, industry connections and streaming-friendly music. Independent artists and record labels were still at the bottom of the food chain, barely subsisting under Spotify’s pro rata royalty scheme.  

There are 675 million monthly active users on Spotify, but active user doesn’t necessarily mean active listener. Which leads to the question Spotify began to ask: Why pay full royalties to real artists if people are only half listening? If you’ve ever found a playlist populated with generic sounding no-name artists, you may have stumbled into the realm of Spotify PFC or Perfect Fit Content, stock music made by ‘ghost artists’, composers and musicians that create music for Spotify (via third party production companies) which they buy outright in lieu of paying royalties. As well as removing an artists’ ability to have a fair share of a track’s potential success, Pelly suggests these practices might also be getting consumers comfortable with the idea of future PFC being made by AI.

Beyond the editorial playlists, Spotify is moving toward even greater levels of data-driven personalisation. In the same way Netflix wants to keep users on its platform all the time, Spotify wants us constantly streaming, no matter what we’re doing. Mood Machine is a compelling examination of how this is impacting our culture. Readers looking for a straightforward business focussed account of how Spotify eclipsed other platforms like Apple Music or Amazon Music, may want to look elsewhere. This is a book concerned with the impact on musicians and on smaller independent record labels. Pelly sees these smaller players as vital to the diversity and ongoing importance of music as something that enriches us all. Mood Machine is a dispiriting but important account of how music streaming works, what it is changing in the culture, and a warning of what we stand to lose simply for the sake of convenience.  

Liz Pelly Mood Machine: The rise of Spotify and the costs of the perfect playlist Hodder & Stoughton 2025 PB 288pp $34.99

Naomi Manuell is a Melbourne writer. She recently won the Melbourne Athenaeum Library Award for best ‘body in the library’ story at the 2024 Sisters in Crime Scarlett Stiletto Awards.

You can buy Mood Machine from Abbey’s at a 10% discount by quoting the promotion code NEWTOWNREVIEW.

You can also check if it is available from Newtown Library.

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Tags: Liz | Pelly, music industry, music streaming, musicians, playlists, record labels, Spotify


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