Spotify’s manager has denied claims that users can accumulate monthly royalties by repeatedly playing their uploaded 30-second track.
Prior to the denial by the company’s CEO, finance analysts at JP Morgan had said that Spotify subscribers could make $1,200 (£960) a month by listening to their song on repeat, 24 hours a day. The claim suggested that the royalty payment structure of the streaming platform could be manipulated.
However, Daniel Ek objected to the claims stating that the royalty system did not work that way.
This assumption was first reported in the Financial Times and then tweeted about by Julian Klymochko, founder of Accelerate, a Canadian-based investment company.
Last week, reports from the Swedish Newspaper Svenska Dagbladet stated that criminal gangs were using Spotify’s royalty system to launder money made through drug deals. The event solidified the reports from the Financial Times. According to them, artificial streaming (where devices run chosen tracks on a loop) was hindering the music industry, with JP Morgan executives estimating that about 10% of all streams are fake.
Based on Spotify’s website, artists are only paid once a month – and how much they get varies.
“Contrary to what you might have heard, Spotify does not pay artist royalties according to a per-play or per-stream rate,” it says.
“The royalty payments that artists receive might vary according to differences in how their music is streamed or the agreements they have with labels or distributors.”