AI-powered music scam nets musician $10M in royalties–and federal charges
arstechnica.com
arstechnica.com
This is definitely the highest profile case I've seen of this, though.
It turns out that the other bits of the deal also matter.
pdf here - https://www.justice.gov/usao-sdny/pr/north-carolina-musician...
As for what makes the botting illegal, in this case its theft through misrepresentation. He was charged with wire fraud conspiracy, wire fraud, and money laundering conspiracy.
https://www.justice.gov/usao-sdny/pr/north-carolina-musician...
Despite the title, there is little AI in here. The automatically generated music barely existed seven years ago. It really does not matter what noise you upload to these services, as it is not really validated. It’s just bots streaming your songs, like you can have bots viewing your website for ad impressions.
I've little sympathy for Spotify and the rest _but_ this scheme -- if I understand how Spotify pays out -- reduces payouts to other folks. I don't know if society is well-served by sending him to prison, but he should definitely be penalized somehow until that money, plus damages, is redirected to actual artists.
It's a simplification, since 100% of an individual's subscription doesn't go to directly to royalties, it's after expenses.
Smaller artists are frustrated with this model as it favours the big artists.
[1] https://support.spotify.com/us/artists/article/royalties/
Edit: added the link.
The increased revenue pool in theory means that other artists were unaffected, Spotify made extra money, the fraudulent artist made extra money and the advertisers lost money. This is probably why they waited 7 years and till they had IPO'd to pull the plug.
do musicians get remunerated per play (in which case, it doesn't matter how many plays other artists get), or is there a fixed pie and it's divided by percentage of share of plays?
If the latter, that's truly a horrible deal for artists.
You know it won't go to the artists. Spotify takes it and at best some publishers (or what name they choose in music) get a little cut on the top to keep in good graces.
This is definitely wrong but this is exactly why I don't really have any sympathy here.
On top of the fact that Spotify probably also did and does the exact same scheme, but that was in a period of "market capture mode" and the adverts didn't care enough to not be frauded. Instead playing the long game. (Blitzar in another response explained this better than I did).
I've long maintained that the "Spotify fucks over musicians" angle is cleverly positioned to hide the "record labels fuck over musicians the same as they always have for 50+ years" angle. Because the big record labels are still doing great in the streaming era!
Same shit, different day either way.
I abandoned that N64 website soon after, but a decade or two later I got an email from a stranger, thanking me for hosting the forums that were a huge part of her growing up, where she made lifelong friends, etc. The thing was, I forgot I even made a forum. Few used it at the time I abandoned it. It was only accessible via my N64 website, but the back end was hosted by a third party forum service, so they must have moderated it all those years. It felt like that episode of the Simpsons where Lisa discovers a civilization in her petri dish.
We tolerate, even celebrate, radiation poisoning when it is killing cancer cells and allowing a person to live.
In a way, the same tends to be true whenever people take from “corpos.” That money ultimately comes from people in some form.
Worst part is that Spotify gained a lot more than 10m from letting this go on for 7 years. I doubt they weren't aware of this, but allowed it becsuse those bots let them attract a lot more than $10m worth of viewers. That's why I have no sympathy.
Here’s mine:
“ Unlike physical sales or downloads, which pay artists a fixed price per song or album sold, Spotify pays royalties based on the artist's "market share"—the number of streams for their songs as a proportion of total songs streamed on the service. Spotify distributes approximately 70% of its total revenue to rights holders, who then pay artists based on their individual agreements. ”
https://en.wikipedia.org/wiki/Criticism_of_Spotify
Spotify didn’t make a single cent less than they usually do because of this.
This is basically a 3rd party helping with the first step. If you want to look at raw revenue over 7 years, maybe Spotify made less. But they definitely profitted by time by allowing it to go on until it was not longer useful (especially now. As Spotify is using music to train their own AI models. Ai generated music will just mess up the model).
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Do I have any hard evidence Spotify specifically does this? Not on hand, but I wouldn't be surprised if I can actually dig up Spotify dirt. This is documented for several other large scale tech companies. I'd honestly be surprised if Spotify was a special case.
I hope that explanation suffices, or is at least more satifactory than what you interpreted as "no, you're wrong".
And yet services like Tidal can afford to pay artists 4-6 times more for the same amount of streaming.
I loved the software and high audio quality, but it just wasn't usable because it didn't have the music I wanted to listen to.
From what I've heard, about 70% of a Spotify subscription pays directly for content to the rights holders, and it is mostly distributed in proportion to 'listens.' This does mean that most of the money goes to a tiny number of extremely popular artists, but that seems more like a social dynamic that always existed with pop music, and not Spotify's fault.
And society. Oh well, billionaires are just a social dynamic. Can't all be rich, best to just accept being poor as rent rises.
Do you truly believe that life is a zero sum game, or is it seeing someone else be rich that in itself bothers you, even if it means you are also living better? Would you prefer to be much poorer, less healthy, etc. in order to make sure everyone else is also? That is the awful life-denying bargain your worldview is offering.
I agree. But the way we monetize life and business becomes zero sum. You don't become a billionaire by giving everyone a living wage. Music is accessible because the top 1% are satisfied and the bottom 50% is fighting for scraps.
If you're a Taylor Swift fan that's not an issue for you, but you can see why this starts to feel zero sum to me, no?
>is it seeing someone else be rich that in itself bothers you, even if it means you are also living better?
It's seeing the rich bask in what's only a evolve above slave labor, as it gets harder and hared for the supposed "middle class"
if you solve world hunger, you can be a trillionaire for all I care. But the sheer inequality and efforts to make it worse is why I'm inherently scrutiny of these companies. Not to even mention all the dark arts tech employs to more or less psychologically exploit people in general. These are not good people trying to do good things for the world.
>Would you prefer to be much poorer, less healthy, etc. in order to make sure everyone else is also? That is the awful life-denying bargain your worldview is offering.
I'd prefer to not psycho-introspect into my own life based on one comment as opposed to just asking me, thank you very much. I hope the explanation above suffices. Happy to clarify, but I won't be replying to any more swipes like this.
They don't really have a choice to avoid Spotify though, unless you consider giving up 30% of the streaming market (which itself is 80% of the overall music market) to be reasonable. Even Taylor Swift couldn't justify being off Spotify.
That rationalizes exactly how we came to this age of enshittification. If you don't value your time Spotify is cheap. But Adverts very much do and at this stage half of Spotify is just regurgitating ads to you unless you pay $10/month (or probably more at this point. They can charge $50/month and not much would happen because the free users will listen to ads anyway).
That's the true tragedy of 21st century capitalism. The invisible hand has failed becsuse people are too lazy to make a choice when they're being exploited.
I pay about $8.50/month (my half of a 2-person account) for unlimited access to any music I want with zero ads... seems like a great deal to me. I don't see any sign of "enshittification," "tragedy," or "exploitation" - just lots of good music for a low price- which was impossible before Spotify existed.
I mean, if people value their time so little, they probably simply couldn't afford even that tiny fee, so at least they get to listen to music they like, instead of listening to ads on the radio with music they can't choose.
I don't get why people think not offering something valuable and expensive to provide for free is evil or a tragedy.
Before Spotify that sort of budget would have paid for maybe ~6 new legal albums per year which I couldn't listen to before I bought, so many would end up not being listened to.
Now the same budget allows me to listen to anything I want anytime- and the money goes to the artists I like in proportion to how much I actually like them instead of how much I expected to like them before I actually got to listen. That seems like the opposite of a tragedy.
we haven't been in the same tech industry the last decade, have we?
>I don't see any sign of "enshittification," "tragedy," or "exploitation" - just lots of good music for a low price- which was impossible before Spotify existed.
I guess you aren't in the US. We just got a price bump
https://www.theverge.com/2024/6/3/24170301/spotify-us-price-...
https://www.cnn.com/2024/06/03/tech/spotify-price-increase/i...
Which is the 2nd price bump this year. But this goes to the workers right?
>Spotify recently increased subscription prices for international subscribers, cut costs and underwent several rounds of layoffs including drastic reductions to its podcast business.
This is what happens with market capture. They run at unsustainable rates for years, and then the squeeze happens when people are too lazy to step out of the pot. And then they squeeze the workers as well by making them do more with less staff.
I wish people wouldn't so easily excuse monopolization. It doesn't end well for anyone but the C-Suite. But as they say:
>Nobody gives a care about the fate of labor as long as they can get their instant gratification. - Squidward Tentacles, 2001
I listen to a lot of EDM on Spotify while working, and nobody has ever accused me of tasteful discernment when it comes to music. I suspect it's only a matter of time before I 'like' an AI-composed song that no one else has ever heard before, after a bot uploads it automatically as part of some kind of scam and Spotify recommends it based on my previous likes.
Borges more-or-less said this would happen, so when it does, I won't be able to say I wasn't warned.
Not a lawyer but I don't see how this is "fraud" or a "scam". He created actual music, which people listened to, and by listening to them, generated royalties. The fact that he could use AI to create hundreds of thousands of different songs is a problem for the music industry, but that's an AI problem in general (art, writing, etc.)
Ah, OK, I see the problem further down in the article. This was the illegal part:
> involved creating thousands of fake streaming accounts using purchased email addresses. He developed software to play his AI-generated music on repeat from various computers, mimicking individual listeners from different locations
For someone smart enough to create bot listeners, it's weird that he wasn't smart enough to not write emails about it :/
That's the only way I can see this scheme working. But it seems odd to me that spotify would not put substantial walls up to validate new users, to prevent what is effectively musical adclick fraud.
I mean, those sound like pretty rad names for punk bands and punk songs. Hadn't heard such original names since Seth Putnam left us.
> This led Smith to pivot to AI-generated music in 2018 when he partnered with an as-yet-unnamed AI music company CEO and a music promoter to create a large library of computer-generated songs. The district attorney announcement did not specify precisely what method Smith used to generate the songs.
I wonder what company he used and whether they can be liable too.