While streaming has become a widespread way of accessing music, it seems that a growing problem is emerging with fraudulent music streams that are now cutting into the loyalty money of legitimate artists. The streaming woes were brought to light thanks to new data from France Center National de Musiquesuggesting that at least 1 percent to 3 percent of music streams in the country are actually fraudulent.
By fraudulent, we mean streams that are generated and often paid for by stream farms and other “bad actors” in an attempt to siphon royalty money from the artists.
About Music business worldwideThe CNM study looked at data provided by Spotify, Deezer and Qobuz alongside data provided by record giants Sony, Warner, Universal, Believe and Wargram. According to the CNM study, music distributed by them in their research represented more than 90 percent of the 10,000 most listened titles on Spotify and more than 75 percent of streams on Deezer.
What they found was that between 1 and 3 billion streams in France were at least discovered to be fake during the survey in 2021. This equates to between 1 and 3 percent of the market.
To put it in numbers, the French music market generated $581.5 million in streaming revenue in 2021. One percent of that figure would be $5.8 million, where three percent would be $17.4 million. Used globally IFPI reports that streaming platforms brought in $16.9 billion in 2021, one percent of that would be $169 million, with three percent at $507 million.
But the problem may be even bigger than these initial findings. CNM reveals that their report relied “on fraudulent streams detected by the platforms and eliminated from sharing by [royalties]”, meaning that only those were caught. They also reveal that such streamers as Amazon Music, YouTube, and Apple Music declined to participate in the study. So the total number of fraudulent streams is likely significantly higher than the original data revealed.
Earlier this month, Universal Music Group CEO Lucian Grainge drew attention to the problem, calling them “bad actors” using illegitimate means to extract royalty income from streaming services.
“For example, just witness the thousands and thousands of 31-second track uploads of audio files whose sole purpose is to game the system and divert royalties. The result? A less satisfying experience for the consumer, reduced compensation flowing to artists who drive platforms’ business models, and fewer cultural moments for fans to share collectively, all of which undermine the creativity and development of artists and their music that the platforms were, in part, designed to foster,” Grainge quoted.
He added, “In the past, the conflict in the music industry was often focused on ‘the bigs vs. the indies’. Today, however, the real divide is between those committed to investing in artists and artist development versus those committed to playing the system through quantity over quality. The current environment has attracted players who see an economic opportunity in flooding platforms with all sorts of irrelevant content, depriving both artists and labels of the compensation they deserve.”
Grainge called for a new updated streaming model, one that supports all artists and values all subscribers, which also increases the value of the platform. He added that this is something his company intends to work towards delivering.
Announcing the CNM report, Jean-Philippe Thiellay, president of the music organization, stated, “For the artists themselves…fraudulent streams disrupt algorithmic profiles and weaken engagement rates…since fake users obviously don’t behave like regular fans.” He called out such fake streaming behavior as 30-second count thresholds driven by bots, fake playlists and illegitimate titles on streaming platforms.
“Stream farms, hacking accounts… the imagination of pirates is rich and evolving, to the point that the countermeasures implemented by the platforms [and] the distributors and rights holders of music, must not only constantly evolve and improve, but also anticipate any counteroffensive from fraudsters,” explained Thiellay.