Within a few days, the owner of an independent record label in New York dropped me a line to let me know about a mysterious phenomenon that was “in the air” and of growing concern to those in the indie music scene: Spotify, the rumor had it, was filling its most popular playlists with stock music attributed to pseudonymous musicians—variously called ghost or fake artists—presumably in an effort to reduce its royalty payouts. Some even speculated that Spotify might be making the tracks itself. At a time when playlists created by the company were becoming crucial sources of revenue for independent artists and labels, this was a troubling allegation.

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According to a source close to the company, Spotify’s own internal research showed that many users were not coming to the platform to listen to specific artists or albums; they just needed something to serve as a soundtrack for their days, like a study playlist or maybe a dinner soundtrack. In the lean-back listening environment that streaming had helped champion, listeners often weren’t even aware of what song or artist they were hearing. As a result, the thinking seemed to be: Why pay full-price royalties if users were only half listening? It was likely from this reasoning that the Perfect Fit Content program was created.

After at least a year of piloting, PFC was presented to Spotify editors in 2017 as one of the company’s new bets to achieve profitability. According to a former employee, just a few months later, a new column appeared on the dashboard editors used to monitor internal playlists. The dashboard was where editors could view various stats: plays, likes, skip rates, saves. And now, right at the top of the page, editors could see how successfully each playlist embraced “music commissioned to fit a certain playlist/mood with improved margins,” as PFC was described internally.

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Spotify, for its part, has been open about its willingness to allow AI music on the platform. During a 2023 conference call, Daniel Ek noted that the boom in AI-generated content could be “great culturally” and allow Spotify to “grow engagement and revenue.”