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Plugged In: Should Music Do More to Combat Fake Streams?

"It's dishonest artists stealing from honest artists, and that's a huge problem."

Welcome to Plugged In, a Billboard column that features the unfiltered thoughts of the CEOs, decision makers and power players at the intersection of technology and music. I’m Micah Singleton, Billboard’s director of technology coverage, leading our reporting on the streaming music ecosystem and the startups that bridge the gap between two of America’s most important exports.

This week: Streaming fraud is still a critical issue in many countries around the world, but not a major talking point in the industry. Does the music business need to do more to combat it?

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Streaming fraud has been a quiet, ongoing problem in the music industry for years, but now governments are starting to fight back and executives are starting to speak up.

Brazil’s government spent 2021 waging a lengthy and still ongoing fight against digital piracy and streaming fraud. As Billboard’s Alexei Barrionuevo and Beatriz Miranda reported today, the Center for Investigations of Cyber Crimes in the Sao Paulo public prosecutor’s office and Brazil’s IFPI affiliate Pro-Música worked together throughout the year to shut down 84 stream-boosting sites as part of an effort called “Operation Anti-Doping.” It was the first time that fake streams had been prosecuted in Brazil as a crime.

The Brazilians’ move is the latest in the ongoing fight against streaming fraud. Germany underwent a similar purge in 2020 as fake streams rose in the country’s hip-hop scene and Spotify has created content to educate artists against using artificial streams. While in some cases artists are paying for fake streams themselves in an effort to do drive up their play counts, gain attention and possibly game playlist algorithms, often acts don’t even know they’re participating in this kind of fraudulent activity.

Multiple sources have told Billboard they believe most of the streaming fraud stems from digital marketing firms hired to promote releases. And it’s not a victim-less crime. When fake streams are used to increase plays on a song, the revenue generated by those streams comes from the overall pie from which rights-holders are paid by streaming services. That’s why many executives refer to the act as “theft,” because it’s effectively taking revenue away from other rights-holders who generated their streams organically.

In the wake of a 2021 Spotify purge that largely affected DistroKid, CEO Philip Kaplan wrote that artists shouldn’t “use any music promotion company that sells playlist placements, or claims they can increase your streams. These companies are likely using illegitimate practices (such as streaming fraud) without your knowledge.”

Still, the practice continues globally as artists are eager for exposure and the music industry continues to play whac-a-mole with fraudsters. Has the music industry done enough to root out the problem?

“Fraud is a significant issue that the industry doesn’t talk about enough,” says one senior executive. “Fraud is perpetuated across every platform. It is part and parcel with every release, it’s a real problem.”

The exec also noted that artists and labels hold liability for the issue as well, as they “are really looking for ways to generate audience and gain notice, and sometimes they do things to boost up their own streams which is equally problematic.”

“I think it’s a huge problem,” says another senior executive. “It is dishonest labels stealing from honest labels or — more importantly — on the artist side, it’s dishonest artists stealing from honest artists, and that’s a huge problem.”

They continue, saying it’s the labels’ responsibility to do more: “I don’t have the feeling that they’re taking their role seriously because there’s a bunch of things that they can do. There’s plenty of distributors and major labels that have people in their org that are trying to game the system. They’re conflicted on their own side. It’s too easy to say that they’re in some parts of the world where there’s maybe less control. It literally is everywhere. We’re taking this very seriously.”

A CEO points the finger specifically at the majors. “I think it’s more of the major labels that are paying these firms to do it, and it’s usually like two or three degrees disconnected and they want that to be the case,” the CEO says. “Label hires legit agency, legit agency outsources a piece of the marketing spend to maybe not so legit agency.”

“People have turned the page on thinking that it’s a problem,” says another CEO, noting that the proliferation of legal music streaming has overshadowed streaming fraud from bot farms. “The idea of theft being a problem seems like it’s not a current issue when we know that it is, so yeah I’d like to see more be done about that type of fraud. It’s not the same challenges during the Napster days where you had a majority of the access happening in illegal ways. Now it’s a problem, but it’s not the dominant problem.”

The industry’s emphasis on metrics like first-week consumption may also be driving the fake streams, says a founder and CEO. “It goes back to authenticity and people craving realness and not getting caught up in a numbers game and this hype around having crazy week one or week two numbers and then it falls off,” they say. “Can the DSPs offer other elements where artists and labels and managers don’t feel like they have to constantly hire these kinds of companies for crazy results and numbers that aren’t real?”

One CMO says streaming services need to make dealing with fraudulent streams a higher priority. “It does need quite a bit of attention and resources across every DSP to figure out how it’s impacting their listener experience and then a determination around what to do about it,” they say. “But it should be in all DSPs’ OKRs for the year so they really figure out how to put a company-wide focus on fixing it.”

Progress has been made and the challenges can be complex with so many artists using digital marketing firms, says a chairperson.

“We feel like we’ve made progress on it, but it definitely exists,” they say. “It’s really difficult sometimes because lots of DIY artists are using tons of digital promotion and marketing companies on the internet. Some of them are absolutely valid. Many of them are not. And that fine line between an indie digital marketing company paying its own influencers or playlisting versus using bots and hitting every 15 seconds on the same song, that can be a difficult line — and sometimes they’re doing both.

“Spotify does seem to have taken this issue very seriously, especially in the U.S. And I think they’ve done a pretty good job of clamping down, given their red flag policy in the U.S. to help stop the West from becoming a giant global hub for stream manipulation. It’s a little bit harder once you get out of a big giant market like the U.S., the U.K. or Japan.”

“This is something that we collectively have to solve as an industry,” a senior executive says. “It’s not right, and we’re really unhappy with it. It’s not a niche problem, it’s a real problem.”