While streaming has become a prevalent way to access music, it appears that an increasing problem is popping up with fraudulent music streams now cutting into the loyalty money for legitimate artists. The streaming woe was brought to light thanks to new data from France's Centre National de Musique, which suggests that at least 1 percent to 3 percent of the music streams in the country are actually fraudulent.

By fraudulent, that means that these are streams that are generated and often paid for by stream farms and other "bad actors" in a bid to siphon off royalty monies from the artists.

Per Music Business Worldwide, the CNM study considered data provided by Spotify, Deezer and Qobuz alongside data provided by music label giants Sony, Warner, Universal, Believe and Wargram.  According to the CNM study, music distributed by those in their research represented more than 90 percent of the Top 10,000 most listened-to titles on Spotify and more than 75 percent of the streams on Deezer.

What they found was that between 1 and 3 billions streams in France were at least discovered to be false during the 2021 study. That equates to between 1 and 3 percent of the market.

To put that into numbers, the French music market generated $581.5 million in streaming revenue in 2021. One percent of that figure would be $5.8 million, with three percent being $17.4 million. Applied globally, the IFPI reports that streaming platforms brought in $16.9 billion in 2021, One percent of that would be $169 million, with three percent being $507 million.

But the problem may be even bigger than this initial findings. The CNM reveals that their report relied “on fraudulent streams detected by the platforms and eliminated from the sharing of [royalties]," meaning those were only the ones caught. They also reveal that such streamers as Amazon Music, YouTube and Apple Music declined to participate in the study. So the total number of fraudulent streams is likely significantly higher than the initial data revealed.

Earlier this month, Universal Music Group CEO Lucian Grainge brought attention to the issue, calling out the "bad actors" using illegitimate means to pull royalty revenue from streaming services.

“For example, just witness the thousands and thousands of 31-second track uploads of sound files whose sole purpose is to game the system and divert royalties. The result? A less fulfilling experience for the consumer, diminished compensation flowing to artists that are driving the business models of the platforms, and fewer cultural moments that fans can collectively share, all of which undermines the creativity and development of artists and their music that the platforms were, in part, designed to foster,” cited Grainge.

He added, “In the past, music industry conflict was often focused on ‘the majors versus the indies.’ Today, however, the real divide is between those committed to investing in artists and artist development versus those committed to gaming the system through quantity over quality. The current environment has attracted players who see an economic opportunity in flooding platforms with all sorts of irrelevant content that deprives both artists and labels from the compensation they deserve.”

Grainge called for a new updated streaming model, one that supports all artists and values all subscribers that also enhances the value of the platform. He added that this is something his company intends to work toward providing.

With the announcement of the CNM report, Jean-Philippe Thiellay, President of the music org, stated, "For the artists themselves… fraudulent streams disrupt algorithmic profiles and weaken engagement rates… since, of course, fake users don’t behave like regular fans.” He called out such false stream conduct as 30-second counting thresholds operated by bots, false playlists and illegitimate titles on streaming platforms.

“Stream farms, hacking of accounts… the imagination of pirates is rich and evolving, to the point that the countermeasures implemented by the platforms [and] the distributors and rightsholders of music, must not only constantly evolve and improve, but also anticipate any counter-offensive from fraudsters," Thiellay explained.

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