Experts warn that fake musicians are making billions by creating songs using artificial intelligence and uploading them to streaming websites.
Cybercriminals use AI to generate songs and then employ fake listeners, called bots, to stream the music and profit from the royalties.
In one example that went to trial earlier this month, a North Carolina man was accused of making $10 million by posting fake songs on platforms like Spotify and YouTube Music, which were played billions of times.
Michael Smith, 52, has been charged with crimes including wire fraud and money laundering conspiracy. He reportedly pleaded not guilty to the charges, which each carry up to 20 years in prison.
Experts warned that his alleged scheme was not particularly sophisticated compared to fraud on music streaming platforms and was just the tip of the iceberg.
Morgan Hayduck and Andrew Batey, CEOs of fraud detection platform Beatdapp, said similar practices were generating at least $1 billion in royalties annually.
Bone farm
“A billion dollars a year in losses is the bottom line. The most remarkable thing about the Smith case is that it was not a sophisticated scheme – it was a run-of-the-mill bot farm,” they said in a statement.
“Beatdapp regularly detects much, much more sophisticated attacks. For example, we’ve seen schemes that abuse stolen accounts of real users at scales that surpassed the size of the Smith bot farm.
“We believe there are more organized, more sophisticated cybercriminals committing streaming fraud at a level that makes the Smith case look like a rounding error.”
They added: “The industry is finally starting to wake up to the scale, scope and severity of this growing problem.”
According to a sample released by prosecutors, Smith allegedly made millions of dollars from his criminal enterprise over the course of seven years, despite using unlikely song titles such as “Zygotic Washstands,” “Zymotechnical” and “Zygophyllum.”
The songs were said to be performed by artists with names like Calm Baseball, Calm Scorching, Calm Connected, Calm Knuckles and Calorie Screams.
Spotify said in a statement that Smith was able to cash out only a small portion of his $10 million in earnings through the platform thanks to anti-fraud measures.
“Spotify is investing heavily in automated and manual reviews to prevent, detect and mitigate the impact of artificial streaming on our platform,” the report said.
“In this case, it appears that our preventive measures worked and limited the royalties Smith was able to generate from Spotify to approximately $60,000 of the $10,000,000 stated in the complaint.
“Given that Spotify typically accounts for around 50 percent of stream share, this shows how effective we are in limiting the impact of artificial streaming on our platform.”
France’s Centre National de Musique concluded in 2023 that up to 3 percent of music streams – around three billion – came from “bot farms.”