The Velvet Sundown Controversy: AI Music, Spotify, and Industry Fallout

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In early July, a rock group named The Velvet Sundown drew significant attention across streaming platforms, particularly Spotify. Within weeks of launching, the band amassed over a million monthly listeners and released two full-length albums, with a third slated for release on July 14. However, the band’s growing popularity was quickly overshadowed by controversy after it was revealed that The Velvet Sundown was not a real band made up of human musicians, but rather an AI-generated music project.

Initial suspicions emerged from Reddit users who noticed the band’s sudden appearance in algorithmic playlists and began investigating its origins. Their findings, combined with a vague and stylized online presence, prompted questions about whether the band was real or artificially constructed. These suspicions were confirmed when the band’s own Spotify bio was updated to disclose that the music, vocals, lyrics, and visual content had all been created using AI, under human creative direction.

Spotify's Role and Industry Concerns

The Velvet Sundown's rapid success and verification on Spotify raised immediate concerns about how the platform handles AI-generated content. Spotify currently does not require artists to disclose whether music is created using artificial intelligence. This policy leaves room for synthetic artists to operate without transparency, fueling concerns from artists, rightsholders, and streaming audiences alike.

While Spotify did not initially respond to inquiries about the band, a spokesperson later stated that all tracks on the platform are “created, owned, and uploaded by licensed third parties,” and that the company does not prioritize or financially benefit from AI-generated music. However, the situation has reignited ongoing debates about the role of AI in the music industry and how streaming services may be using such content to reduce royalty payouts.

Deezer Flags the Band, Reaffirms AI Policy

Shortly after the controversy surfaced, competing platform Deezer identified The Velvet Sundown’s album Dust And Silence as “100% AI-generated.” The company emphasized its position on AI use, stating it excludes fully AI-created tracks from algorithmic and editorial recommendations in an effort to protect artist remuneration and ensure user trust. According to Deezer, nearly 20% of music uploads on their platform are now AI-generated—a figure that has doubled in just three months.

Photo Credit: thevelvetsundownband

Industry-Wide Implications

The timing of this revelation is notable. A December 2024 report from the International Confederation of Societies of Authors and Composers (CISAC) projected that music professionals could lose over 20% of their income to AI-generated music by 2028 if regulatory measures are not introduced. In contrast, developers of AI music tools are projected to see their earnings rise dramatically from €0.1 billion in 2023 to €4 billion over the next four years.

These figures align with concerns raised by artists and advocacy groups. Musicians including Nick Cave, Elton John, Kate Bush, and Paul McCartney have publicly urged governments, especially in the UK, to update copyright laws to better protect human creators from the unchecked use of generative tools in music.

The Larger Picture

The Velvet Sundown case has become a focal point in the conversation around artificial intelligence in music. While the project framed itself as an “artistic provocation,” it also served to highlight wider industry tensions around transparency, streaming platform practices, and the protection of creative labor.

As AI-generated content continues to grow in visibility and volume, questions persist about how streaming platforms will balance innovation with responsibility especially when it comes to compensating artists fairly and maintaining listener trust.

Rareform Audio will continue monitoring developments as the conversation around AI and music evolves.

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