Fake Streams Could Be Costing Artists $300 Million a Year

Two months ago, Louis Posen, founder of the long-running California label Hopeless Records, noticed an aberration in his company’s streaming numbers. A track was cruising along, earning roughly 3,000 streams a day. Then, “All of a sudden it got 35,000 streams a day for three consecutive days,” he says.

The jump was unusual. Posen declined to name the track, but launched an investigation into the numbers. “When we looked at where those streams came from, 100% of them came from six playlists on Spotify,” he says. “It couldn’t be more suspicious: The playlists were created recently; they gained a bunch of followers in one week; they’ve never gained another follower since then; and all the plays happened in a three-day period.”

Indie labels are increasingly concerned about this sort of manipulation, which shifts income from more principled acts to those who are willing to pay to hotwire the system. “My sources” — Posen declined to name them — “think that three to four percent of global streams are illegitimate streams,” the label head says. “That’s around $300 million in potential lost revenue moved from legitimate streams to illegitimate, illegal streams.” (Rolling Stone was unable to independently confirm the percentage of streams that are illegitimate.)

He cited this figure again during a panel discussion about streaming manipulation at Indie Week — a four-day conference in New York focusing on the issues facing the independent music community — on Tuesday. Posen was joined by Angel Gambino, Chief Commercial Officer at Napster, Markus Tobiassen, a journalist from the Norwegian paper Dagens Næringsliv who has investigated alleged streaming manipulation by TIDAL, and Bruce Houghton, who runs the music industry news site Hypebot. “In streaming, there’s a finite pot of [revenue],” Houghton told the crowd. “If any of that that goes to an illegitimate source [due to streaming manipulation], that’s a problem for [members of the independent community].”

Gambino offered those in attendance a broad definition of streaming manipulation — “anything which isn’t fans listening to music they love” — but the most concerning cases can be sorted into different classes. One is like a streaming version of pay-for-play, what Tobiassen referred to on the panel as “bread and butter manipulation.” In this scenario, artists or their marketing teams pay to get into playlist networks in hopes of boosting streams. “Playlisters create a network, and are like, ‘I have access to a million monthly listeners,’” explains one person who works in digital distribution but preferred to remain anonymous. “Artists pay for [access to] that.”

“In a shared-pool model, you’re stealing from people who are getting legitimate streams.”

A second, more sophisticated manipulation effectively involves defrauding the streaming services using what Posen describes as “computerized click farms and bots.” Bots generate streams that may not come from real users. But technology is now advanced enough that Posen also believes people are capable of “hacking into legitimate accounts and streaming from those accounts when they’re not streaming music,” thus disguising fake streams as real ones.

“[Technology] has gotten more sophisticated,” Amir Kashani, co-founder of media and strategy consultancy Salt + Vinegar, tells Rolling Stone. “Where do you want your plays to come from? You can buy territories as well. You can have the plays come out of Brazil vs. Argentina.”

A third manipulation is like the streaming service version of identity theft. In March, for example, someone bundled leaked Rihanna tracks and demos into an album titled Angel and uploaded them to iTunes and Apple Music. In these cases, leaked music or music that purports to be by a famous artist — but is not — picks up streams. The money from the fake album did not go to Rihanna; it accrued to a user named “Fenty Fantasia,” someone piggybacking off the star’s preexisting popularity.

The result of all these processes is the same: The fake streams divert precious attention from other artists who have not paid to enhance their numbers. “In a shared-pool model, you’re stealing from people who are getting legitimate streams,” Posen says. “You’re not just getting your own bump; you’re hurting somebody else.”

The rise of noticeable cases of streaming manipulation parallels breaches of good faith on other popular tech platforms. In the case of streaming, “we’re dealing with a technology that’s grown faster than the protections, just like Facebook and the other social media platforms,” Posen notes. “[Streaming services] got so big, they don’t have the resources to make sure people aren’t abusing the platform.”

Reps for multiple streaming services, including Spotify, Apple Music and TIDAL, did not respond to requests for comment.

“Wherever there is a marketplace and an opportunity to make more money based on performance, you’re going to see perversions and manipulations.”

In addition, the intensely competitive nature of the music business leads artists to believe that using the digital equivalent of steroids might be the difference between a hit and a dud, a record deal and a life spent working a mind-numbing nine-to-five. “Wherever there is a marketplace and an opportunity to make more money based on performance, you’re going to see perversions and manipulations,” Kashani says. “Gaming a system is somewhat universal.”

Sure enough, it’s easy to find stories about artists paying for seemingly magic programs to pad their streaming numbers, either through third-party playlists or more complex means. “You’re just trying to get a song moving,” adds a second manager speaking on the condition of anonymity. “If [paying for streams] works, it’s like a booster pack.” The digital distribution expert continues, “the idea is to give [a song] a push, get some momentum.”

There is doubt in the industry as to whether these techniques work — “It’s mostly a way to scam money out of young managers and artists,” a third manager says — and whether they are cost-effective. In the case of the complex stream-boosting techniques that look more like fraud, “artists, and most times managers, want a quick fix,” Kashani says, “but you’re potentially handing over some very, very sensitive information about an artist to get 50,000 views.” Still, some camps feel the allure of a potential shortcut to success.

The easiest version of streaming manipulation to stop might be the most obvious one: fake albums. The distribution platforms the Orchard, CD Baby and Distrokid all recently partnered with Audible Magic, which bills itself as “the leader in automated identification of audio and visual content,” to ensure that music they push out to streaming services is legitimate. “There’s a small minority of bad actors trying to game the system,” says Audible Magic CEO Vance Ikezoye.

But it may be harder to detect methods of enhancing streams. Gambino’s advice at Indie Week boiled down to a D.A.R.E. talk: “Just don’t do it.”

“[Streaming services] got so big, they don’t have the resources to make sure people aren’t abusing the platform.”

Since the music industry is increasingly dependent on streaming, the fact that some streams may not be reflective of actual market demand is increasingly concerning. Streams on Spotify and YouTube factor into chart performance. Similarly, streams are used to calculate market share, which impacts label strategies.

On top of that, streams of dubious origin undercut the authority of the streaming services themselves. At the Indie Week panel, Tobiassen suggested the “biggest problem” with fake streams is that it could hurt “trust in the industry.” Those in charge of streaming services are fond of saying that their platforms reflect the will of the listening public, but streaming manipulation distorts that.

“It’s in the early stages of people understanding it,” Posen tells Rolling Stone. “Talk to labels and artists: They don’t have any idea that money is being taken out of their pockets.”