Fake Streams Aren’t Slowing Down
The problem is bigger than most people realize, and it seems to benefit major-label stars as well as developing acts, according to internal data from SoundCloud.
As streaming became the dominant mode of music consumption, fraud and “fake streams” have been regarded as a minor nuisance — generally acknowledged but seldom worried about. Most industry executives tend to see this activity as a way for aspiring acts to inflate their numbers, and thus their commercial potential, or as an avenue for grifters to steer money into their pockets by running up plays of white noise or rain sounds.
At least since this summer, however, SoundCloud has detected evidence of fraudulent streams or manipulation on multiple releases from both notable independent acts and major-label artists, including hitmakers with track records of successful singles, according to two sources familiar with the company’s operations who spoke on the condition of anonymity. And this is not unique to SoundCloud. This summer, Deezer executive Ludovic Pouilly told the French investigative publication Les Jours that it has become more common to see “artists in the top 200 who have millions of real streams” have fake streams as well.
Streaming services are increasing their effort to fight the fakes. In a statement, a spokesperson for SoundCloud said, “We take the issue of stream manipulation extremely seriously and make every effort towards identifying and mitigating inauthentic plays.” It’s not alone: Earlier this year, a Spotify spokesperson told Billboard, “Stream manipulation is an industry-wide issue that Spotify takes very seriously.” SoundCloud also works with a third-party company that “specialize[s] in bot detection” to fight stream manipulation, an executive said at a Music Biz panel in May. (The panel had a pointed title, “They’re Coming For Us: Fraudsters & How We Stop Them.”)
Streaming executives say there are a handful of ways to fraudulently boost an artist’s numbers, including harnessing bot networks or fake or stolen user accounts, and that this activity is becoming “more intense,” as Pouilly put it. At Music Biz, Napster senior vp and general counsel Matthew Eccles noted that fraud on the platform “increased over COVID.”
In fact, the current streaming business is rife with “very prevalent fraud and abuse,” according to SoundCloud vp of strategy Michael Pelczynski, who spoke at the same panel. This abuse has “cultural ramifications,” Pelczynski added: If fraudulent streams go “undetected and not policed, and [they] start influencing the way we measure the success of music, we are literally supporting inauthenticity.”
The level of fake streams detected varies by service and region. At one point, bots on Pandora were generating “a large, large fraction of spins,” according to George White, senior vp of music licensing at SiriusXM, “nearly equaling” the amount coming from human accounts. Pouilly told Les Jours that “7% of the volume of daily streams [on Deezer] is now detected as fraudulent.”
The Merlin Network, which handles digital licensing for many independent labels and distributors, used to send members a monthly report detailing the percentage of fraudulent streams from their releases on Spotify; this February, 2.5% of ad-supported streams and 1.2% of the plays from premium Spotify accounts were identified as fraudulent. (Asked about the issue, a spokesperson for the platform said that stream manipulation was “an industry-wide issue.”) The ad-supported number was nearly 10% at one point in 2020, according to one executive who received the report.
As evidence of what Pelczynski dubbed “prevalent fraud” grows, music executives worry that artists who are playing by the rules will start to feel pressure to pad their numbers in order to keep up with rivals — especially in an increasingly crowded landscape where it feels harder than ever to stand out. Paying for fraudulent streams “will become a marketing expense that everyone needs to employ if it’s left unchecked,” White warned at Music Biz.
Eccles from Napster worried that the music industry could enter a phase like professional cycling decades ago, when cyclists felt compelled “to dope” just to compete at a high level. It is “key,” Eccles stressed, “to avoid a situation where that happens in music.”