The IFPI has already shaken down streaming manipulation operations in Germany, Canada, and Brazil. Now, whispers abound of a stepped-up global crackdown on this shadowy market.
Last year, Beatdapp estimated that streaming manipulation costs the global music industry $2 billion — a year. So, time to finally haul in the bad guys? Not so fast — at least according to our intel.
Suddenly, whispers abound on an impending crackdown on streaming manipulation, with the IFPI potentially dropping the hammer on shadowy operators — and operations. The IFPI is predictably ghosting us on this one, though it appears the global trade organization is planning a more serious enforcement campaign against streaming manipulation hubs.
The IFPI has already seen success in Germany, Canada, and most recently, Brazil, tackling various fraud schemes. But are these simply the smaller fish?
In details touted this year, the IFPI teamed up with Pro-Música Brasil to halt a streaming fraud operation in the country generating over 28 million fake plays and stolen tracks — and a whopping haul of… $65,000.
In fairness, the IFPI and Pro-Música operation also resulted in arrests, $400,000 in seized assets, and the removal of fraudulent content and fake artist profiles from Spotify. But if this shadowy corner of the business is siphoning off $2 billion in legitimate royalties, there’s still much work to be done here.
Enter the major labels and major streaming platforms like Spotify, who are apparently less-than-enthused about the prospect of a global crackdown. But why, you ask?
Despite rumors of an aggressive IFPI campaign to finally bring this situation under control, DMN has also heard that not everyone is on board — with some movers+shakers actively disinterested in the IFPI’s purported crackdown.
That raises the question: are the major labels truly on board for a widespread and impactful enforcement effort, or will this “crackdown” merely target small-time players while leaving the bigger fish untouched?
Those entrenched in the DSP game are aware that the scales are weighted — on a number of levels.
Over the years, we’ve covered some murky situations involving major-signed stars like French Montana and G-Eazy, though there’s some debate over just how much manipulation is happening out there.
Enter the cage-rattling Drake, who recently blasted the largest label in the world (i.e., Universal Music Group) and one of the largest streaming platforms in the world (i.e., Spotify) for juicing tens of millions of fake plays of Kendrick’s ‘Not Like Us’. Unsurprisingly, Spotify quickly dismissed those claims, though Drake’s legal team is just getting started on a pan-industry discovery interrogation.
Separately, a deeply-nestled insider at Sony Music Entertainment pointed to ‘too many buried bodies’ at the label before leaving it at that.
On that note, another source pointed to a distinct lack of court cases involving streaming manipulation in the US.
That’s certainly noteworthy, though not entirely accurate. Currently, a significant federal criminal action remains pending against Michael Smith, accused of directing billions of bot streams to AI tracks and allegedly netting over $10 million in ill-gotten royalties.
However, Smith’s case focuses on AI-generated music, rather than the underlying issue of paying entities for fake streams of real tracks. What some might call ‘classic’ stream manipulation theoretically remains a separate concern.
Either way, are the majors the reason for the curious lack of litigation against lucrative streaming manipulation operations? Indeed, one source pointed to a ‘meticulous avoidance’ by the majors of anything resembling a serious legal crackdown in the US, given the guns that might get pointed at both majors, DSPs, and others in the mix.
Let’s see how this all plays out for the IFPI, but one possibility is the trade group continues to pounce on smaller fish.
Moving on, another wrinkle surrounds the future of the IFPI itself. With majors aggressively paring down costs, is the IFPI’s budget — which primarily comes from the ‘big three’ — suddenly in trouble?
One source noted that country-specific orgs, like the US-based RIAA, have a stronger position here given their teeth and relationships in their home countries. A pan-global trade organization may suddenly be viewed as less critical, particularly in the eyes of extremely cost-conscious shot-callers like WMG chief Robert Kyncl.
More as this develops.
