“FRICTIONLESS” is one of those tech-world ideals that sounds more promising than it actually is. What if you could press a button and get all the music in the world? And what if that music were somehow organized into playlists that seemed perfectly suited not only to your tastes but to your mood at the moment? No more having to buy, no more decisions to make, just a frictionless stream of sound at your fingertips, 24/7. How could this go wrong?

MOOD MACHINE: The Rise of Spotify and the Costs of the Perfect Playlist, by Liz Pelly. Atria/One Signal Publishers, 288 pages

All too easily, it turns out.

In Mood Machine, Liz Pelly details the many ways in which Spotify, the world’s leading music-streaming service, has in less than two decades transformed music fandom, the music business and music itself. Founded in 2006 in Stockholm, at the time a hotbed of music piracy, Spotify would provide an alternative to illegal downloads. It was not the first such attempt, but earlier efforts gained little if any traction: Jean-Marie Messier, the architect of the conglomerate Vivendi Universal, fantasized about a streaming service a quarter-century ago. Other music-industry efforts came to grief over their insistence on tying up streams and downloads with nonsensical usage restrictions. The only clearly successful digital-music marketplace was Apple’s iTunes, and it wouldn’t offer streaming until some time after Spotify arrived in the U.S. Yet today, streaming is by far the most popular means of listening to recorded music, and Spotify—with a market capitalization that has more than doubled in the past year to approximately $100 billion, thanks in part to expectations that it may finally show a profit—is by far the most popular option.

Ms. Pelly looks at all this and asks: At what cost? She’s been reporting on Spotify for years, mostly for an iconoclastic publication called The Baffler. She’s an indie-music fan and no friend of what one ex-Spotify engineer she interviewed calls “brain-turned-off listening.” Notwithstanding the undeniable convenience of streaming, Ms. Pelly lays out multiple downsides—for the fans, for the music scenes they’re part of and especially for the musicians.

Take the ghost-artist phenomenon: anonymous musicians hired to write and record to order for a flat fee. Anything considered “chill” or “ambient” could get the treatment. The product is aural wallpaper, assembled in playlists that address a particular mental state—meditation, relaxation, even sleep. “Music just inoffensive enough to not get shut off,” Ms. Pelly calls it. Within Spotify it is known as “perfect fit content,” or PFC: mood-fitting music the company can stream on the cheap. Unsurprisingly, it tends to crowd out work by name musicians. Until it was fully reported on in an exposé by the Stockholm newspaper Dagens Nyheter, the program was so hush-hush that sometimes an elaborate identity would be invented for the nonexistent artists who supposedly created this stuff—bio, social-media accounts, personal website. Yet there’s little to suggest that audiences notice or care. On the contrary: By the mid-2010s, Ms. Pelly reports, “sleep playlists were absolutely crushing it on Spotify.”

As its playlists became increasingly dominated by music from content farms—low-wage operations producing dreck for somebody else’s profit—these mood classifications turned into what Ms. Pelly calls “streambait,” the aural equivalent of clickbait. It’s a flawed analogy because clickbait is junk content nobody wants, while streambait actually fulfills a desire. But the distinction is telling. Spotify’s actions aren’t, for the most part, cynical attempts to sucker its audiences; they’re attempts to play up to the audience and make more money doing so.

On its investor page, Spotify defines its mission as “to unlock the potential of human creativity” by enabling musicians to live off of their work and fans to be inspired by it. This doesn’t exactly conform to the picture Ms. Pelly paints. Streaming, which is supposed to let music flow like water, turns out in the Spotify scheme of things to be boxed in by arbitrary or data-determined constraints. And so we have the sudden appearance of such previously unheard-of microgenres as “solipsynthm,” “braindance,” “traprun” and “otacore,” while actual microscenes like hyperpop (a niche sub-sub-branch of electronic dance music) are distorted beyond recognition by playlists that share the same name but little else. Yet every initiative the company takes—even its adoption of “Discovery Mode,” a payola-like program to convince musicians to accept a 30% cut in royalties in exchange for placement on more playlists—is done with a rah-rah spirit that seems strangely inappropriate for the reality behind it.

So what’s the alternative? Unionization? A more plausible option, at least for the kind of microscenes Ms. Pelly favors, might be the public library. She points to such examples as Iowa City’s Local Music Project, which has the municipal library distributing music by area bands who get $100 upfront to participate. It’s hard to imagine this working for Kanye West or Mariah Carey, but one of Ms. Pelly’s complaints is against Spotify’s one-size-fits-all business model.

Her biggest objection, however, is to Spotify’s devaluation of music and, not coincidentally, musicians. She doesn’t care if Spotify makes a profit; she cares whether music as a recognizably human-generated art form survives the algorithmic imperative.

Tension between art and commerce is hardly new. Spotify’s most egregious transgressions—replacing genuine artists with musicians for hire, offering to promote an artist’s work in exchange for lower royalties, an opaque payment setup that gives artists a fraction of a fraction of a penny when a song is streamed—are squarely in the music-industry tradition of shortchanging the people who make the whole thing possible. So is its cavalier disregard of the subcultures from which these people spring—an indifference that yields music the author describes as “homogenized.” Yet Spotify has proved quite innovative at finding ways to update the industry’s less savory traditions, and Ms. Pelly’s meticulous documentation makes Mood Machine an important book. A little friction, it seems, can be good to hang on to. ◆