Why So Many People Are Leaving Spotify (And Why Spotify Is Scrambling)

Lately, I’ve seen a ton of YouTube videos and articles carrying the same message: Spotify is the worst. On Twitter, Reddit, and other social platforms, fans are announcing they’re leaving the app, while big artists and bands are pulling their music. On the flip side, Spotify just announced two big changes: a much higher-quality audio option and a search engine for free users—features people have been asking for forever—and the longtime CEO, Daniel Ek, has finally stepped down.

It looks like Spotify’s losing a lot of customers. To keep people happy (and subscribed), they’re rolling out features to make folks stay. But why is all of this happening? Why do people hate Spotify so much? From controversial military investments to very shady business practices related to fake artists, Spotify’s been in hot water for a long time. It feels like we’ve finally hit a boiling point.

Below, I break down how we got here—from the early days of piracy to AI-generated artists, payouts, playlists, and politics—and what might be next.

From Piracy to Streaming: The Setup That Made Spotify Possible

If you were a music fan in the late 2000s, you basically had two options:

No surprise: piracy exploded. Napster peaked at around 60 million users. The RIAA sued 18,000 users in the U.S. alone—many of them kids—and lots of cases went to court. It didn’t work. According to one of Spotify’s founders, 98% of online music consumption at that point was illegal.

Are There Any Privacy Concerns With Spotify?
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Streaming was the industry’s counterpunch. Early streaming platforms existed (some since 2001), but they weren’t great. PressPlay, for example, cost nearly $20/month (in today’s money) for only 300 streams, and most services were slow and clunky with long buffering times.

Enter Daniel Ek (And The “Save Music” Narrative)

Daniel Ek—talented programmer, controversial figure—claimed he founded Spotify to save music. But given that Spotify initially planned to host videos and movies too, that’s debatable. Ek himself often comes off as not particularly interested in music. His statements have sparked backlash:

• In 2024, he tweeted that the cost of producing content was “close to zero.”
• Earlier, he said artists can’t “record music once every 3 to 4 years and think that’s going to be enough.”

Definitely an “evil tech CEO” vibe.

Still, Spotify quickly became huge. Just two years after launch, it hit 10 million users. Compared to competitors, the experience was seamless:

• Co-founder Martin Lorentzon (an advertising expert) helped Spotify’s name explode.
• Ek’s expertise in search helped you find any song instantly.
• At $10/month, you got almost every song you could want.

But that affordability came at a cost.

The Payout Model: Why Artists Are So Angry

Spotify doesn’t pay artists per stream directly. Instead, it:

1. Takes total revenue for a period
2. Keeps 30% for itself
3. Distributes the rest to rights holders based on their percentage of total streams

Example: If Taylor Swift accounts for 1% of all Spotify streams, “Taylor’s side” gets 1% of the artist pool. But Taylor herself may only keep around a quarter of that after the label’s cut.

• Average payout: around 0.04 cents per stream
• After label cuts, many artists see about a tenth of a cent per stream
• Listening to your favorite artist 1,000 times? That’s roughly $1 to them

For context, early services like PressPlay paid 1 cent per stream—meaning Spotify was the lowest payer of the bunch.

This model also makes botted streams particularly harmful. If other artists bot their numbers and you don’t, they get a larger share of the pool and your payout shrinks. On top of that, independent artists often get less than major-label artists—majors at one point owned 18% of Spotify Premium In the early years, major-label artists were paid around six times more than indies.

The Industry Impact: From Record Sales To Tour Dependency

In the 20th century, musicians made most of their money from record sales. Concerts were promotional. That’s why a ticket to Woodstock 1969—featuring artists like Jimi Hendrix—was about $100 in today’s money.

Now, tours are big money-makers artists rely on. It’s not the only reason tickets are so expensive, but it’s a big piece of the puzzle.

Low payouts are why many artists historically refused to put their music on Spotify. The Beatles avoided Spotify for its first nine years, fearing it would cannibalize sales. Jay-Z pulled his music in 2017 in a failed attempt to launch a fairer rival (Tidal).

Spotify has long said it can’t afford to pay artists more. That argument used to be more convincing when they were losing money. But last year, Spotify made over a billion dollars in profit—much of which reportedly avoids taxes due to headquarters in Luxembourg, a notorious tax haven. If YouTube Music can pay around twice as much per stream, Spotify probably could pay more too.

How many monthly streams does it take to make minimum wage (with zero costs)?

• About 567,000 streams a month.

We even found an artist right around that number—Alison Moyet. If she relied solely on Spotify streams (which is how many listeners consume her music), she’d make minimum wage. Oh my god.

How Playlists Quietly Shape The Sound Of Pop

Spotify initially revolved around its search engine—Ek called it “the Google of music.” But as executives realized most listening happens in the background (and as they prepared to launch in the U.S.), they leaned into playlists. Today, around 50% of listening happens on playlists.

Spotify’s official playlists aren’t curated by a person. They’re powered by a complex, data-driven system sometimes described (informally) like a “syndicate”:

• Top tier: the biggest lists (RapCaviar, Viva Latino, Beast Mode)
• Mid tier: still huge but smaller (Most Necessary, Gold School)
• Bottom tier: small lists where new tracks get tested

Tracks graduate upward if they have low skip rates and high replays.

This can help smaller artists break through—but it’s controversial. In theory, all songs compete on equal footing. In practice, major labels employ entire teams lobbying Spotify to add their songs.

Worse, this system encourages bland, “don’t-scare-anyone” music. Because low skips are everything, slow-burn intros can tank a track’s retention (think: you design your video’s hook—artists do that with songs now). Some slow intros are great—like Pink Floyd’s Shine On You Crazy Diamond—but they’re risky. With so much background listening, many artists make anonymous, inoffensive music where the goal isn’t to excite you—but to avoid you turning it off. That’s a big reason pop in the 2010s often felt bland and flavorless.

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The “Fake Artist” Problem: Ghost Tracks For Cheap

By the mid-2010s, Spotify was massive—but bleeding money (in 2017 alone, it lost over $1.3 billion). At the same time, it was paying huge royalties to labels. As more users listened “half-attentively,” Spotify started to wonder why it should pay full royalties for background music.

Fake-artists
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That’s when Spotify allegedly began pumping out tracks by ghost artists. The reported model:

• Pay session musicians cheaply to crank out hundreds of bland, personality-free tracks tailored to playlist needs
• The goal, as one musician put it: “to be as milktoast as possible. Play simply and inoffensively.”
• Musicians churn through dozens of tracks per session, give them one-word names, and collect a check
• Spotify buys the rights outright—so even if the track hits tens of millions of plays, the musician’s compensation stays a low, flat fee

According to an investigation by the Swedish newspaper “News of the Day,” only 20 individual musicians were responsible for 500 separate Spotify artists whose tracks collectively have millions of streams.

Sometimes Spotify-linked bios fabricate backstories. Example: EFAT’s page claims he’s a classically trained Icelandic beatmaker from a conservatory in Reykjavík (still no idea how to say that town’s name—let me know in the comments below). In reality, that “artist” is reportedly three separate Swedish session musicians. That’s why playlists like Peaceful Piano are flooded with artists who have no photos, no online presence, and no life outside that playlist.

By 2023, over 100 official Spotify playlists were reportedly composed entirely of fake songs. Some of the biggest playlists might include these. Deep Focus—with almost 5 million saves—was allegedly more than 90% fake. Ask Spotify and they’ll deny it.

Then AI Hit: Thousands Of “Artists” That Don’t Exist

Generative AI made everything worse. Paying session players to make fake songs is shady, but at least musicians get paid. With AI, not even that.

Case in point: Deshawn Williams—an artist on Spotify with trap-inspired meme rap like “Seuss Gone Savage” and “Mama Ain’t Raised No.” He dropped his first song in April this year, then released 127 more, racking up 324,000 monthly listeners and multiple million-play tracks. But Deshawn Williams doesn’t exist. The instrumentals, lyrics, album covers, song titles—everything—is AI-generated. Covers look terrible. Tracks don’t sound like the same person. Still, he pulled big numbers.

He’s not alone:

• Tennessee Reaper
• Georgia Phantom
• The Velvet Sundown (most infamous; at one point had ~500k monthly listeners)

I was doing Spotify research when Autoplay sent me to a band called “Lost in Blues.” No social media. No info. Bland music. Likely AI. If I were listening mindlessly, I wouldn’t have noticed.

There are tons of stories of people realizing some of their most-played “artists” aren’t real at all. There’s no evidence Spotify itself is behind these AI artists—but given the history, it’s not hard to imagine. At the very least, they were initially open about doing nothing. Scratch that—after backlash, Spotify said they’d start cracking down a bit more.

The Bot Crackdown That Hit Real Artists

When Spotify tried to get rid of bots, it didn’t go smoothly. One evening, veteran artist The Flashbulb (Benn Jordan), who’s been making music for decades, found his entire discography removed from Spotify.

• He contacted TuneCore (his distributor). No help for a while.
• He escalated to TuneCore’s CEO and the parent company to get any response.
• He was accused of using botted streams—something he says he didn’t do.
• Spotify claimed “evidence” but wouldn’t show it.

What likely happened: someone created a playlist of AI songs, then used bots to farm plays to get a slice of Spotify’s revenue pool. To make it look legit, they added a few real artists—like The Flashbulb. Spotify tried to clamp down but seemingly nuked everyone in the playlist, including legit artists, while letting actual fakes slip.

In other words, if you hate a specific artist, you could theoretically create an AI-heavy playlist, add their songs, bot the playlist, and wait for their catalog to get taken down. Obviously don’t do this—that’s wrong and very illegal—but it’s apparently possible. Which is crazy.

Identity Theft: AI Albums Uploaded To Real Artists’ Pages

It’s not just takedowns—people can upload music to your page, too.

Earlier this year, Emily Portman got a fan message congratulating her on her new album. Problem: she didn’t release one. An AI-generated album designed to sound like her had been uploaded to her Spotify page without her consent.

It’s disturbingly easy to do. I tested uploading “my” music to “my” own profile:

• The system automatically had my Spotify URI ready
• I made “artwork” (truly beautiful, obviously)
• Filled out the forms, checked the boxes to make it look 100% legit
• Got the fun little check mark
• Waited—and it went live

When this happens to major artists, they can often fix it quickly. Indies can’t. It can take weeks or months to get removed. One bad fake release can ruin the trust of a small fanbase that took years to build.

The Political Flashpoint: Weapons, AI Warfare, And A Boycott

Spotify’s founders have never hid their politics—generally right-leaning, pro–lower taxes, and pro–less regulation. Martin Lorentzon has worked with Sweden’s Moderate Party. For years, no one cared much.

That changed in 2021, when Daniel Ek invested €100 million in Helsing, a weapons company specializing in drones and AI-driven warfare. Sounds like a villain-company from a sci-fi movie. Helsing says it sells only to democracies, which includes at least one extremely controversial country—the one and only Jewish state and only democracy in the Middle East.

Earlier this year, Ek went further—investing another €1 billion and becoming Helsing’s chairman. People were not happy.

Artists started pulling music:

• Deerhoof, a major experimental rock band, withdrew in June
• Zu (or Xi—name pronunciation unclear) also pulled their music
• Most recently, Massive Attack—8 million monthly listeners—announced they were leaving

They wrote:

“In the case of Spotify, the economic burden that has long been placed on artists is now compounded by a moral and ethical burden whereby the hard-earned money of fans and the creative endeavors of musicians ultimately fund lethal dystopian technologies. Enough is more than enough.”

So far, no single artist is big enough to seriously threaten Spotify alone. But in 2021, when Neil Young and Patti Smith withdrew their music over Spotify’s deal with Joe Rogan, Spotify quickly added COVID-19 misinformation disclaimers to relevant podcasts.

This time, given the size of the Helsing investment and Ek’s role as chairman, it would be surprising if Spotify backed down—unless a ton of major artists follow.

A Pattern: Profit Over People

Across all of these stories runs a common thread: Spotify will do anything to make money. Yes, that’s what businesses do. But Spotify feels uniquely comfortable torching relationships with musicians, listeners, and the public for a few extra bucks.

A perfect example: Spotify Wrapped. In 2019, intern Jewel Ham proposed a detailed plan to make Wrapped more exciting. In 2020, Spotify implemented those ideas—but she got no credit and no share of the revenue. A tiny piece of the profit would’ve set her up for life. Wild.

The Competitive Landscape (And Why Spotify Is Suddenly “Improving”)

The last few years haven’t been great for Spotify’s public image. User numbers are up, but market share is down. With new competitors (Amazon, YouTube Music) and Apple stepping up, Spotify can’t assume it’s automatically king anymore.

Cue the improvements and feature drops:

• Higher-quality audio
• A search engine for free users
• New playlist mixing features people are excited about

They clearly want to save face and keep up. It might buy time—but if things continue like this, other services could quickly overtake what was once the dominant music platform.

If You Want An Alternative

If you liked this, you might enjoy my video about Jay‑Z’s Spotify competitor, Tidal. It definitely failed at first, but honestly—with where Spotify’s headed—I could see it making a comeback. This isn’t an ad, but you might end up liking it more than Spotify if you want to retaliate against them. Check out the video on screen right now.

Other than that, it’s been your boy Matty Balls. Make sure to like and even subscribe down below if you enjoyed that much. But yeah, other than that, I’ll see you guys next time.