The Record Industry’s Fake Fight Against Streaming Fraud

Over the last few years, the success of music streaming in boosting industry revenue presented a new source of concern: fraud. Stress about manipulated stream counts aren’t simply about artists misrepresenting their popularity, otherwise known as marketing. The industry’s usage of a market share split of revenue, called pro-rata, makes artist manipulation an issue beyond previous questions of dubious metrics as in the difference between a record “shipped” and “sold”. 

Major streaming platforms and their label counterparts are often ready to take a clear stance against fraud, when it is weeding through illicit businesses looking to exploit their systems. Yet, the fact of reporting on fake streams often notes that garnering dubious streams can happen under the nose of an artist or a label.

There just isn’t an economic reason for labels to push back against inflated streaming numbers because it means they can get paid more, and that the artists who allegedly manipulated Tidal’s number were investors in the company, only goes to show just how direct the benefit of such illicit behaviour can be. Again the authors demanded in their paper a more serious consideration of how much control platforms hold in space: “The reality, of course, is that platforms do have material interests at stake in questions of what ‘counts’ as genuine content worthy of algorithmic amplification. This becomes especially  clear when considering what advice platforms furnish to content creators as alternatives to  practices they consider ‘gaming the system.’”

This original paper examines companies like Google and Instagram that make most of their revenue from advertisement, which are rather explicit in not wanting people to game their metrics. The companies sell ad placements in their feeds to firms that want to reach the massive audiences they hold. Fighting manipulation of their own metrics is directly inline with their business interest, where streaming platforms and labels aren’t so well aligned. Instead the system they’ve created in many ways exists to further promote such behavior since more streams just increase potential revenue and increases the notoriety of certain albums and artists.

This industry created problem is the core business of the company Beatdapp that claims streaming fraud is as high as 10% in certain markets. I can’t help but think of any issue in need for a true third-party and not-for-profit oversight in the music streaming it’d be in streaming. Something that certainly didn’t exist in the era of physical sales. This could push all parties involved to address issues of fraud but would remove much of the power these companies hold in policing what is good and bad behavior. When Weverse, HYBE’s digital storefront, encourages the fans who create reports on how to properly stream albums to buy up multiple album copies that’s innovation, but a company offering illicit streams to promote a song is a concern for industry panic. The hypocrisy knows no bounds.

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