In accordance to NME, it has been reported by BBC News finance analysts at JP Morgan that ‘spotify subscribers could make $1,200{£900} a month from listening to their own 30-second track whilst it played on repeat over a 24-hour day.’
If this be true, it would suggest that Spotify’s royalty payment structure could be manipulated.
However, Spotify’s CEO Daniel EK in response denied claims by indicating ‘that is not quite how our royalty systems works’. Instead, the company configures of two tiers of royalties, whereby artists are paid once a month. This figure varies in accordance to ‘differences in how their music is streamed or the agreements they have with labels or distributors.
In a disclosed Financial Times article, JP Morgan executives estimate 10% of all streams are fake. This was revealed after concerns of artificial streaming, ultimately, causing a disservice to the music industry.
Spotify continues to deny claims of false streaming on the platform by stating, ‘contrary to what you might have heard, Spotify does not pay artist royalties to a per-play or per-stream rate’.
In reaction to the recent allegations of forged streaming, Universal Music Group and Deezer announced that they would be collaborating to launch a music streaming model aimed at generating larger royalties for artists. This new approach permits acts to receive more money if subscribers actively listen to their tracks.
It may only be a matter of time before other major platforms; Spotify and Apple Music are forced into revising their own models.
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