Mon. Jul 22nd, 2024

The True Cost of Streaming Fraud: Artists’ Incomes Hurt

The True Cost of Streaming Fraud: Artists’ Incomes Hurt

Image credit: Kenny Eliason

Music streaming fraud is taking valuable revenue out of artists’ pockets, and the true cost of it may shock you.

A music data tracking firm has revealed a shocking new figure on how much streaming fraud could be costing the industry. The figure reveals how much this harmful act affects the earnings of hundreds of thousands of real artists.

Beatdapp Software found in their analysis that around 2 billion dollars streaming royalties are taken by streaming fraud every year. The company says they are “a leading authority on fraud detection” and their report highlights just how damaging the practice is.

Beatdapp CEOs Andrew Batey and Morgan Hayduk told Sky News: “We didn’t notice that a few pennies would go to this song and a few pennies would go to that song, but in total they can steal billions of dollars.”

Fraudulent streaming can take many forms, but is essentially the practice of artificially streaming a song in order to generate revenue. Since streaming services provide income to artists based on their track count, some bad actors try to take advantage of this by artificially boosting streams.

This hurts the potential of legitimate artists making a living from their work on streaming services. As Batey and Hayduk say: “That money would have gone to real artists who would have been used to pay managers and agents and lawyers, record companies, distributors. But instead, it gets disabled and goes to professional scammers who just steal from the industry.”

How the industry tackles fraudulent streaming

Big players like Deezer and Spotify have made moves to tackle the fraud issue. Both streaming services have pledged further efforts to eliminate and punish fraudulent streaming, with an emphasis on rewarding legitimate artists with the proceeds.

Spotify’s new artificial streaming policy fines distributors and labels that host artists who artificially stream their tracks. At RouteNote, we work closely with streaming services, including Spotify, to help eliminate this bad practice for the benefit of legitimate artists.

Spotify’s new policy will not affect legitimate artists working with RouteNote. Fees made by Spotify will not come out of the total pot, thus protecting artists’ income.

As the industry does more to prevent the potential $2 billion in lost revenue from streaming fraud, artists should see their own earnings increase.

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