Streaming fraud accounts for at least 1-3% of plays on services like Spotify and Deezer in France, shows investigation

This is a snowball.

Last week, Popular music group Boss Sir Lucian Grainge call out “bad guys” for using illegal means to extract royalty revenue from music streaming services; Grainge argues that the dominant ‘proportional’ payment model of these platforms needs to change.

Yesterday (January 17), MBW bring the words by Nick Dunn, CEO of the independent distributor Horus musicwho welcomed Grainge’s letter – and spread false rumors that his company had seen evidence of online fraud by “criminal gangs” who even threatened to kill his employees for stopping their activities.

What this story lacks, however, is solid, industry-verified data on how widespread (and costly) the problem of streaming fraud is in the music business.

That just changes.

of France Center for Country Music (CNM) iis a public authority in the country and operates under the supervision of the Ministry of Culture and Communication.

You may remember CNM for its depth investigation on the impact of user-centric (or ‘fan-powered’) music streaming licensing in 2021.

This week, CNM published the results of another landmark study of the French music industry – this time focusing on illegal streaming practices.

Conclusion? At least 1%-3% of domestic music is a scam. i.e. They are created, often through paid streaming farms, by such “bad guys” to extract royalties from legitimate artists.

CNM says that their new study looked at a huge dataset provided by Spotify, Deezerand Qobuzplus data provided by “a group of distributors” (including Universal, sony, Warner, Believe and Wagram).

Music distributed by these companies accounted for more than 90% of the 10,000 most-streamed titles on Spotify, and more than 75% of all streaming on Deezer, for the relevant time period, CNM said.

As reported by CNM, in France, between first Billion and 3 billion streams are “at least” found to be “wrong” in 2021. In a nutshell, those numbers roughly equate to the middle. first% and 3% of the total number of plays on the market that year.

If we apply this 1-3% With a broader threshold of industry value metrics, the significant scale of the online fraud problem becomes apparent.

French music market in 2021 was created 492 million euros ($581.5 million) in annual streaming revenue according to the French music organization SNEP.

One percent of that number would be €4.92 million ($5.8 million). Three percent would be €14.76 million ($17.4 million).

And if we apply the same metrics globally?

Worldwide commercial revenue of music streaming platforms (including paid subscriptions and ad-supported) in 2021, is 16.9 billion USD according to IFPI.

One percent of them will 169 million USD.

Three percent would be 507 million USD. ie the end half a billion USD.

The real problem could be much bigger than 3% of streams, CNM notes, because it says its reporting is based solely on “fraudulent streams that are detected by platforms and removed from sharing [royalties]”.

In other words: they only count scammers already are not get rid of it.

CNM adds that it is “certainly certain that the reality of spurious streams far exceeds what is detected, it is impossible to give an exact number… as they are not within the detection range”.

In addition, the body has called amazon music, YouTube and apple music for refusing to participate/provide data for the study.

CNM says that these platforms “are unable or unwilling to share their data to the extent of their defined observations, despite any assurances of security that CNM has provided to them.”

CNM reports that hip-hop/rap music represents 84.5% Fraudulent streams detected among Spotify’s top 10,000 tracks in 2021.

To some extent, this was predictable: hip-hop is the dominant genre in the French market (accounting for more than 50% of the top 10,000 songs on Spotify and 40% on Deezer, according to the report). ).

However, CNM further explains that compared to total number of streams generated by hip-hop and rap in 2021, cheat streams represent a small fraction of the genre’s total listens, with 0.4% share on Spotify and 0.7% on Deezer.

The study claims that the market share of streams found to be fraudulent over total plays of other specific genres is significantly higher for background music likes (4.8% on Deezer) and ‘non-musical titles’ (3.5%).

“The possible distrust of users in the face of systems with room for fraud is a risk that should not be underestimated.”

Jean-Philippe Thiellay, Center for Country Music

In announcing the CNM report released this week, Jean-Philippe Thiellay, President of the music organization, said (translated): “In the context of the penetration rate of [music streaming] service in French households still has room for improvement compared to ours [UK]neighboring countries Germany or even the US… the possible loss of trust among users in the face of systems with room for fraud is a risk that should not be underestimated.”

Added Thiellay: “Finally, for the artists themselves… the cheat streams disrupt the algorithmic configuration and weaken the engagement rate… because of course, fake users don’t behave like regular fans. “

Thiellay notes that “well known” mechanisms used to generate fraudulent streams include “false plays that exceed the 30-second count threshold operated by a robot or natural person, [as well as] wrong playlist, [and illegitimate] additional titles on the platform”.

He continued: “Streaming farms, hacking accounts… the imaginations of pirates are so rich and growing, that countermeasures are taken by the platforms. [and] distributors and music rights holders, must not only continually develop and improve, but also anticipate any counter-action from scammers.”

“Now that the industry is growing again — largely as a result of UMG’s strategy, investment and innovation — new players as well as some bad guys don’t share our commitment to artists. and artistry has penetrated the resurgent industry.”

Sir Lucian Grainge, Universal Music Group (Writing New Year’s Letters to employees)

written in a new year note With staff last week, Sir Lucian Grainge, President and CEO of Universal Music Group said: “Now the industry is growing again — largely as a result of strategy, investment and innovation. new UMG — new players as well as some bad actors have not shared our commitment to the artists and arts that have been making inroads in the resurgent industry.

Grainge added: “In the past, conflicts in the music industry often centered on ‘specialists versus independents.’ Today, however, the real difference is between those committed to investing in artists and developing artists versus those committed to fooling the system through quantity over quality.

“The current environment has attracted players who see an economic opportunity in flooding the platforms with all sorts of unrelated content that earns both artists and studios the compensation they deserve.”

Note: EUR-USD currency conversion in this story is based on published IRS average annual exchange rate.Global Music Business