News /
Spotify Is Changing Its Royalty Model To Crush Streaming Fraud

Spotifys plan?. To shift $1 Billion in payouts towards ‘working artists’ over the next 5 years.

Financially penalizing distributors of Music – Labels included – when fraudulent activity on music that they’ve uploaded to Spotify

Spotify believes it has the most sophisticated anti-fraud detection technology of any streaming platform – and it’s not afraid to use it.

Witness the moment back in May when Spotify pulled tens of thousands of tracks off its service because it had credible evidence that said tracks were being streamed illegitimately (either via AI tools or via human so-called ‘stream farms’).

Sometimes, those turning to such methods are indie artists – or indeed larger labels – looking to illegitimately boost their stream count or their chart placings via Spotify.

At the darker end of this practice, however, some suggest that organized criminal gangs are now uploading AI-made music to streaming services like Spotify before attempting to use artificial streaming methods to siphon off royalties from the platform’s pay-outs pool.

In every case of this practice, honest artists and rightsholders miss out on Spotify royalties, which are instead paid to those gaming the system.

Right now, people can try to game Spotify, get caught, see their tracks taken down, and they haven’t lost anything.

By penalizing this kind of activity at the point of distribution, Spotify wants to create a deterrent both for the bad actors, but also for the distributors enabling those bad actors.

“The hope is that this deterrent will, over time, mean fewer people risking streaming fraud on Spotify – and more money entering the pot for real artists and rightsholders to benefit from,” says a source.

Streaming Fraud has increased rapidly. These trends should be considered for CMOs who are reviewing their current systems and processes. Talk to Spanish Point Technologies about our Matching Engine to help prepare your systems for the future.