- JP Morgan suggested that users could make over $14,000 a year by gaming Spotify's royalties system.
- Boss Daniel Ek said the lucrative side hustle wasn't possible as it was "not how our royalty system works."
The boss of Spotify has shot down claims that users could make $1,200 a month by uploading 30-second songs to the streaming service.
Analysis by JPMorgan reported by the Financial Times this month found that if users posted their own 30-second song to Spotify and programmed their phone to listen to it 24 hours a day, they would accrue royalty payments of $1,200 a month.
Spotify CEO Daniel Ek denied that this was the case, posting on X this week: "If that were true, my own playlist would just be 'Daniel's 30-second Jam' on repeat!" before adding: "But seriously, that's not quite how our royalty system works."
A spokesperson for Spotify told Insider that streaming earnings are not paid out to rights holders in real-time. Plus, "our systems regularly detect and remove artificial streams before payouts reach significant levels," they said.
Spotify has come under scrutiny over the amount of fake music on the site in recent years. The Swedish streaming giant recently removed tens of thousands of AI-generated songs, and JPMorgan executives have estimated that up to 10% of all streams are artificial, generated by automated listeners in an attempt to game Spotify's royalty system, per the FT.
—Daniel Ek (@eldsjal) September 11, 2023
Like much of the music industry, the streaming service is grappling with how to deal with AI music. Spotify removed "Heart on My Sleeve," a viral hit sung by an AI imitation of Drake, after Universal Music complained that the song violated its copyright.
Daniel Ek previously said there are "legitimate concerns" around AI music, and said Spotify will try and "establish a position" that will protect artists while also allowing innovation.
Separately, a Swedish newspaper last week reported that gangs were using fake Spotify streams to launder money.
The report in Svenska Dagbladet said that Swedish gangs were purchasing fake streams for songs released by rappers with connections to organized crime with money from contract killings and drug deals. The rappers would then collect royalty payments for their songs from Spotify, effectively laundering the money.
A Spotify spokesperson said there was no evidence that the streaming service was being used for money laundering, and that "less than 1% of all streams on Spotify have been determined to be artificial."