The gist is that your listening hours for your subscription are pooled with everybody else’s, then artist payments are made out of ratios from that pool. That means if you subscribe and listen to music 24hrs a day, and somebody else subscribes and listens to 1hr a day, you essentially have more influence over the pool of money and so can pay out to the artist you are listening to more than you pay Spotify.
Agreed, at best they could “make” is the cost of the subscription minus Spotify’s fee in this system. So I put $10 in and get $7 out (making up numbers). For money laundering it could make sense but I agree, nothing else makes much sense.
See my comment as a sibling to yours for a link, but Matt Levine made a post about how the pooling seems to work at Spotify. All the subscription money is pooled together, and all listening hours are pooled together. Artists are paid out at the ratios of everybody’s listening hours pool, not just each individual subscriber.
This means what individuals pay doesn’t matter at all to the artists they listen to. All you need to do is rack up a lot of listening hours, to have an outsized impact on the resultant listening hours pool. Then if enough other subscribers barely listen to any music, you can earn more than the $10 you put in.
Unless it is money laundering, this excuse makes no sense