Here’s a great business opportunity. Well OK it’s illegal but there’s real money here.
A man in North Carolina has made $10 million dollars in royalties from Spotify, Apple Music and YouTube by using AI to create thousands of fake bands with hundreds of thousands of fake songs which he uploaded to the streaming services. Then he programmed bots to ‘listen’ to the songs and generate royalty checks.
Federal marshals arrested him last week.
Can’t blame a guy for trying. 
So the crime is basically that he made money?
I’m no lawyer but if you make money fraudulently, that’s illegal.
“WHAT CONSTITUTES FRAUD
Under common law, three elements are required to prove fraud: a material false statement made with an intent to deceive (scienter), a victim’s reliance on the statement and damages.”
Fraud is illegal, but this is new ground legally and the accused will have his day in court so who knows, maybe the charges will be thrown out. Here’s the indictment and explanation from the US Attorney’s office.
I was mostly kidding, but it’s just funny to me how corrupt (powerful) people in the music industry were/are, but that seems to be just fine. lol
I just read “Dangerous Rhythms” by TJ English which is the history of the connection between organized crime and jazz. I have to wonder just how much difference there really is between the mob and the so-called legal/legitimate music industry.
I thought this video covered it really well…
He’s probably only as corrupt as Spotify.
I’d be happy if he just kept their money.
That would be cool, but according to the US attorney:
“Each time a song is streamed through one of the Streaming Platforms, the songwriter who composed the song, the musician who performed it, and in certain cases other rights holders, are entitled to small royalty payments. Royalty payments are made proportionately to musicians and songwriters, so that streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.”
So as I understand it Spotify has it set up so that Mr. Super-Streamer isn’t getting Spotify money, he’s getting OUR money.
The beat goes on.
“streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.”
This ‘explanation’ in this case seems flawed. No funds for ‘legitimate’ steams are ‘diverted’ because of this. The fraud isn’t even that a stream of AI songs generate revenue for a ‘fake’ band. I would expect the ‘fraud’ is only in the fact that the stream was consumed by a bot, and not an actual listener (who could be subject to advertisements and other manipulations.)
Funds were ‘diverted’ from Spotify… not other legitimate artists/streams. Spotify is pissed that they got duped into paying royalties for streams ‘listened’ to by some robots who don’t care about their advertising. I don’t care about their advertising either… only difference is that the advertising annoys me and the bots don’t care one way or the other.
I’m no expert and I’m not sure if I trust Spotify but according to their website:
"We distribute the net revenue from Premium subscription fees and ads to rightsholders.
From there, the rightsholder’s share of net revenue is determined by streamshare.
We calculate streamshare by tallying the total number of streams in a given month and determining what proportion of those streams were people listening to music owned or controlled by a particular rightsholder."
So if someone has a bunch of fake streams they will get a share of the pooled net revenue just like someone who has legitimate streams. And everyone in the pool gets less because the fake streams change the proportions of the shared pool. That would be fraud and the legitimate artists are paying for it.
Ahhh… I see. Thanks for the clarity. My ignorance is showing 
Assuming the ‘revenue pool’ is ‘fixed’ (e.g. they know how many paid subscribers there are and they know how many ads they play on average over a given time period of streaming) the higher the number of streams, the smaller the cut per stream? That’s probably oversimplifying it, but I guess that helps explain why you have to have such a high stream count to get anywhere.
Yeah, I don’t really fully understand how steaming payouts work either. It all seems very vague and arbitrary to me. It never seems to be a set amount per listen.