Criminal groups are siphoning billions of dollars annually from the music industry through fraudulent streaming activities, according to a streaming technology firm.
Music Streaming Fraud
According to Sky News, Beatdapp, a platform specializing in detecting streaming fraud, revealed that approximately 10% of all song streams are fake, resulting in losses between $2 billion and $3 billion globally each year.
In 2023, global streaming activity surged by 33%, recording a total of 7.1 trillion song streams, as reported by Luminate, a music data provider. Streaming revenues reached $19.3 billion during the same period, according to the International Federation of the Phonographic Industry, constituting more than two-thirds of the industry's total revenue.
Andrew Batey and Morgan Hayduk, co-CEOs of Beatdapp, highlighted that fraudulent activities exploit the digital music supply chain by impersonating artists and artificially inflating stream counts using stolen account details. This scheme redirects royalty payments away from legitimate rights holders to fraudsters.
They emphasized the complexity of detecting such fraud, which involves monitoring various metrics streaming platforms provide to identify abnormal streaming patterns.
User-Centric Accounting Model
Phil Kear from the Musicians' Union suggested adopting a "user-centric" accounting model for streaming services could mitigate fraud.
This model would ensure that subscription fees are distributed based on the artists each listener streams, potentially disrupting fraudulent practices where listeners' fees currently disproportionately benefit major artists and labels.
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