Spotify continues to be the most-used of all the streaming music sites with a market cap of over US$30 billion, which is only a US$1 billion short of the value of the entire recorded music industry. This puts the company under tremendous continuous financial scrutiny.
Analysts at investment band JP Morgan have some thoughts (paywall) about how Spotify can be gamed by bad actors. In a report on the company, JP Morgan said that if someone uploads a 30-second song and put it on repeat 24/7 and then mute the volume, it was possible to earn US$1,200 a month. These same analysts also estimate that 10% of all streams on Spotify are fakes like these. If that’s the case, then billions of dollars are lost to scammers every year. What’s more is that there are “loop farms,” companies that host devices that do nothing but play songs on repeat in order to boost streaming royalties.
JP Morgan goes further, raising questions about AI-generated music. They say that the platform could become “littered with AI-generated rubbish, potentially exploding from 100 million songs to more than a billion in a few years.”
On the surface, that makes an awful lot of sense. Get an AI program to generated hundreds or even thousands of 30-second musical pieces, run them all in loops for months at a time and just wait for the cheques to roll in.
Spotify has responded to this. CEO Daniel Ek
tweeted X-ed this.
Spotify’s website (via the BBC) explains the company’s two tiers of royalties.
“Contrary to what you might have heard, Spotify does not pay artist royalties according to a per-play or per-stream rate. 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.”
Still, the 30-second-volume-down-song-on-repeat trick sounds plausible, doesn’t it?