Spotify’s CEO has disputed suggestions that customers can earn monthly royalties by frequently listening to their own uploaded 30-second single.
According to JP Morgan finance analysts, Spotify members may earn $1,200 (£960) each month by listening to their song on repeat 24 hours a day.
According to the argument, Spotify’s royalty payment mechanism could be manipulated.
However, according to Daniel Ek, CEO of the streaming behemoth, it is not how the platform’s royalties function.
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Julian Klymochko, the founder of Accelerate, a Canadian-based investment firm, tweeted about the hypothesis after it was initially reported in the Financial Times.
“If that were true, my own playlist would just be ‘Daniel’s 30-second Jam’ on repeat!” Mr. Ek responded through Twitter.
“However, that is not how our royalty system works.”
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Concerns have been raised that artificial streaming, in which devices play selected tunes on repeat, is harming the music industry, with JP Morgan officials estimating that up to 10% of all streams are phony, according to the Financial Times.
Svenska Dagbladet, a Swedish newspaper, revealed last week that criminal groups were utilizing Spotify’s royalty system to launder money from drug sales.
According to Spotify’s website, there are two tiers of royalties, and artists get paid once a month – although the amount they receive varies.
“Contrary to popular belief, Spotify does not pay artist royalties on a per-play or per-stream basis,” the website states.
“The royalties that artists receive may differ depending on how their music is streamed or the agreements they have with labels or distributors.”
Universal Music Group and Deezer recently announced a collaboration to launch a music streaming strategy targeted at increasing royalties for artists – in other words, musicians would be paid more if customers actively want to listen to their music.
This could compel Spotify and other streaming services, such as Apple Music, to change their business models.
