Spotify Illegally Streamed MP3s Before Getting Proper Licenses, Investigator Claims

Spotify, Stockholm Office (Jon Åslund, CC by 2.0)
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Spotify, Stockholm Office (Jon Åslund, CC by 2.0)
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Spotify, Stockholm Office (Jon Åslund, CC by 2.0)

Spotify’s CEO came from one of the largest torrent hubs on the planet.  But now, there are allegations of a more criminal connection to Swedish music piracy.

For most artists, Spotify is a gigantic black box.  But maybe this platform’s history is even murkier than its confusing royalty payments.

Just this morning, researcher and author Rasmus Fleischer started spilling the beans on years of research on Spotify.  And it’s a little different from the official company history.

Why is Fleischer doing this research?  Well, he’s a Swedish PhD writing a book on how this industry game-changer came of age.  And, he’s being financed in part by the Swedish government itself.

Maybe Swedish socialism doesn’t always turn up the cleanest results.  Fleischer’s book comes out early next year.  But ahead of that, he’s sharing some of his findings.  A lot of it involves stories of hobnobbing with superstars and politicians, battling with major labels and innovating against download-based piracy.

But there’s also this little nugget, disclosed to Swedish publication DI this morning:

“The entire Spotify beta period and its early launch history was propelled by the Pirate Bay,” Fleischer explained (translated from Swedish).  “They’d never have had that much attention without the Pirate Bay happening.   The company’s early history coincides with the Pirate Party emerging as a hot topic, with the trial of the Pirate Bay in Stockholm District Court. ”

“Spotify’s beta service was originally a pirate service.”

But the connection goes far deeper than that.  In fact, Fleischer alleges that Spotify was directly connected with the Pirate Bay.  Literally.  “Spotify’s beta version was originally a pirate service,” Fleischer said.

“It was distributed mp3 files that the employees uploaded from their hard drives.”

In other words, exactly the same operation that buried competitors like Grooveshark.  And to prove it, Fleischer relayed the story of a band that specifically uploaded its own music to the Pirate Bay.  A few days later, it found that exact music uploaded onto Spotify’s beta offering.

“That seemed strange,” Fleischer recalled.  “So I emailed them and asked then how they got that music.  They simply said ‘right now during our beta launch, we’re using whatever music we can find.”

Perhaps the big difference is that Spotify quickly shifted into licensing discussions, while Grooveshark essentially refused.  And as the power of torrenting declined, the industry recognized that streaming services were the main reason.

And what about those playlists?

Fleischer also examined why Spotify features certain artists on their playlists.  Who picks the winners?  So far, the process appears unclear and seemingly arbitrary, with employees sometimes choosing winners and losers based on their personal preferences (more on that later).  But Fleischer is also trying to decode playlist and recommendation algorithms with actual users, though he hasn’t released any findings.

Spotify Teardown – Inside the Black Box of Streaming Music will be released on MIT Press early next year.



10 Responses

  1. YoungOg

    And this is surprising why?

    What other option do you have as a streaming service starting at ground zero. Are you gonna write handwritten letters asking artists to sign up? FOH

  2. FarePlay

    Clearly, the founders of Spotify, who both came from the bit torrent world eith no knowledge of the music business have done serious, lasting damage to musicians, songwriters, publishers, record labels, recording studios, sales of recorded music, the list goes on.

  3. Adam

    Bwhahah. This news is 10+ years old. Every one in Sweden knew that the music in the beta wasn’t from licensed sources. Spotify even admitted (and blogged about it) that a few months after launch and removed a huge amount of music.

    I know you hate Spotify management cause they wouldn’t hire you but come on now. 2-3 anti-Spotify articles a week is getting a bit silly by now.

    • Adam #2

      I completely agree with you Adam. DMN has become the epitome of Internet Trolling. Paul’s Spotify articles come across as butt-hurt jealousy and click-bait. Nothing more.

  4. Vail, CO

    Any attorney who wants to bank $10MM+ on ONE case should simply start a class action. The damages (at $150,000 per infringement) would be astronomical

  5. Paul Resnikoff

    This adds to major labels’ leverage in negotiations. Strangely they’d be suing themselves (as near-20% shareholders collectively from what I’ve heard); but hey. Dirt is dirt.

    • Sven

      Hey Paul

      What’s the Statute of Limitations for an IP infringement claim in Sweden? Am sure you are factoring that in to your analysis on the labels’ leverage.

      • Paul Resnikoff

        Worth looking into. Well, this would be less than 10 years ago. That’s a short statute of limitations.

    • Petter

      Paul – some of the first people to get beta access to Spotify were label bigwigs. Before they had licensed the company. So clearly they’ve known all along.

  6. SiteIsAjoke

    Paul’s bitterness toward Spotify knows no bounds, almost like he got kicked out of the band or lost his girlfriend to the lead singer. Where’s the article on Spotify doing a direct listing which rewards their employees with no stock lockup while also giving a middle finger to investment banks?