Spotify has denied claims of a loophole that could see subscribers earn big money through a simple trick.
The claim – first reported in the Financial Times (FT) – suggested anyone could upload their own 30-second track to the streaming platform and then set their devices to play it on repeat all day, every day, raking in the royalties.
Finance analysts at JP Morgan reportedly estimated users could earn about $2000 a month by exploiting the alleged loophole.
Julian Klymochko, founder of Canadian investment company Accelerate, promoted the claim on X (Twitter).
Executives estimate 10% of all streams are "fake" already, the FT reported, with "streaming farms" operating to exploit financial incentives. Swedish newspaper Svenska Dagbladet even alleged that gangs were laundering drug money through the system.
Spotify CEO Daniel Ek responded to Klymochko's amplification of the supposed hack.
"If that were true, my own playlist would just be 'Daniel's 30-second Jam' on repeat!" he joked.
Forbes estimates Ek's net worth is US$2.9 billion (NZ$4.9 billion).
"But seriously, that's not quite how our royalty system works," he added.
How do royalties work on Spotify?
The Spotify website backs up Ek's view.
"Contrary to what you might have heard, Spotify does not pay artist royalties according to a per-play or per-stream rate," it reads.
"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."
The BBC reports artists are paid once a month through the two-tiered structure.
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