An alleged scammer has been arrested under suspicion that he used AI to create a wild number of fake bands — and fake music to go with them — and faking untold streams with more bots to earn millions in ill-gotten revenue.
In a press release, the Department of Justice announced that investigators have arrested 52-year-old North Carolina man Michael Smith, who has been charged with a purportedly seven-year scheme that involved using his real-life music skills to make more than $10 million in royalties.
Indicted on three counts involving money laundering and wire fraud, the Charlotte-area man faces a maximum of 20 years per charge.
Government when the elites use loopholes and do devious shit:
I sleep
Government when the peasants use loopholes:
Straight to jail
TBF, this particular loophole doesn’t take any money from the streaming services. Quite the opposite, it massively inflates their stats.
And while it does siphon money from the big labels, it also impacts small indie artists just trying to earn enough from each play to get to eat.
Yeah, this guy is in trouble because he stepped on some big toes, but he curb-stomped a bunch of little guys, too.
So corporations use ai and bots themselves in order to inflate their stats and steal money from investors and share holders(see Reddit) and its all cool. Someone does that but it costs the corporation some money. Straight to jail.
Seriously, how has the reddit IPO which was offered to users not been a fraudulent scheme due to the website statistics being based on genuine user interaction with no mention of auto reposting or bots that are either operated by or hired by reddit?
It genuinely seems like the next ponzi scheme but that would require so many federal agencies that stopped giving shit and learning how the world works to see any peep into that business.
But what do I know, I’m just some average Joe that gets audited over a $300 mistake on annual taxs which I have to pay a private third party more than that to do.
Using AI to provide services or crawlers to scan the internet for pages to add to search evinces is different from what this guy did with bots. Those use cases are not pretending to be a legit user in order to collect money.
What this guy did — using bots to fake listen to music — is in the same category as using bots to click on ads that you put on your own web page: it’s serving no legitimate purpose and only exists to defraud businesses which paid for the ads (or Spotify which is paying the royalties)…
Spotify didn’t lose a dime. Their cut is fixed.
What each play is worth is determined by how many plays there were in a month, and the income from subscribers that month.
If the “pot” is ten bucks, and people listen to a hundred songs, each artist gets ten cents for each play. If there were a thousand plays, each play is only worth one cent.
This guy didn’t make money by taking it from spotify, he made it by taking it from everyone else. Spotify actually has no reason to care, and playfarming scams have been happening for years.
They only get stopped when they get big enough for the giant music labels to notice.
How does that work though? Presumably he’s not paying subscription fees on all of his bot accounts, so they must be free accounts. I don’t use Spotify, so I don’t even know why they would have free accounts.
Unless he’s hacked other people’s accounts, then that would make sense for the seriousness of these charges.
There are various methods.
Spotify does have a free tier.
But paid accounts can rack up so many plays they can pay for themselves. If you listened to ten tracks, but someone else listened to ten thousand, then your money barely paid for what you listened to, and almost all of it went towards whatever the other user listened to a bunch.
There has also been malware that hijacks legitimate accounts… There’s even been recommendation algorithm fuckery to manipulate the relevant tracks into getting recommended/autoplayed for a bunch of users.
The whole system seems like a sham to me. If one artist has fans that listen 24/7 and another artist has fans that only listen for one hour a day (but that artist is all they listen to), it should be the same. Each person’s account should have its own “pot” out of the subscription fee that only they can allocate to the artists they listen to. Duration of listening shouldn’t matter at all.
impacts small indie artists
How?
I read the article but I don’t understand how bots making and listening to songs to generate royalties for the bot owners affects anyone but the royalty-payers?
The “royalty payers” are the streaming subscribers, and they pay the same amount regardless of how much they listen to.
The different streaming services have different payment models, but Spotify at least works by first taking their cut from subscribtion income each month.
Then, the rest is evenly distributed to the plays that month.
By inflating the playcount with bots, this guy gets a bigger share, at the expense of everyone elses plays becoming worth less.
None of the services have some infinite money glitch where more plays just means more money out of nowhere. How much you get for each play is not a fixed amount, It’s always based on how much money actually came in from subscribers, so anyone using bots to tilt the scales, is stealing from everyone else.
Agreed. As a person that has released music, I hate this guy and would like the book thrown at him and anyone mass releasing shitty AI music… It might not be a big corpo doing it, but it’s still fucking creatives over.
it also impacts small indie artists just trying to earn enough from each play to get to eat.
I’m sorry but it’s the 21st century, even small indie artists can have their own sites nowadays or, heck, use bandcamp, sellaband… you can’t really use technological complexity as an excuse to depend on fat middlemen.
It’s not “complexity”.
It’s that end users have no interest in paying for individual songs.
You and me might buy our music on bandcamp, but the vast, vast, vast majority of people still just pay for spotify and never give how it works a second thought.
A moderetely successful indie artist is still likely to make way more having their albums on streaming services, than they are selling them on bandcamp.
you can’t really use technological complexity as an excuse to depend on fat middlemen.
Is that what I’m doing? At no point did I say streaming services could be fair and good if only this one issue was fixed. Merely that play farming works by skimming the money from real artists.
Now, I’d also like to ask “wtf”, since you are kinda suggesting that it is the artist’s that are at fault for not getting the money they need to live, by not using their own websites/bandcamp.
Sounds like they are just pissed that he found a way to beat them at their own game.
Fyi Spotify has been doing stuff like this for years, hire dirt cheap artists, make up a fake artist/band name, upload generic jingles and implant them on every single category playlist they can. Prime example are playlists for things that don’t have too much complexity like lo-fi, calm piano, stuff like that. Disgusting. Edit: u can spot them out by digging thru some of the “artists”, and when u find one with fishy profile try looking them up on other platforms. Millions of plays on Spotify but nearly nonexistent outside of it? That’s a plant😂
I didn’t even know about this but I think you’re right. I just scrolled through the Calm Piano playlist and the third song down was by an artist with millions of streams, but absolutely zero online presence outside of Spotify and Apple Music. Their about section was just a generic sentence.
I hate this. So the idea is that the cost of creating this music is less than the payout of streaming royalties if they push the songs on their official generic playlists, effectively keeping the money in-house rather than paying to an external artist… yay…
How would that benefit Spotify if they are the ones paying the royalties to themselves? Wouldn’t that be net zero?
They don’t pay equally to everyone. They benefit large artists more than smaller ones. If you only listen to your totally unknown friend’s music on Spotify, most of your money will still go to popular artists you don’t listen to, and your friend will get nothing because they’re below the threshold of getting a payment. It’s basically theft. Now if some of those popular artists are Spotify themselves behind the scenes, guess where your money is being funneled.
Take it this way, if 1 person pays 10$ a month for Spotify and gets about 50 hours of music out of it, it’s more beneficial for Spotify if a significant portion of that time is spent on music they pump into the playlists themselves, which costed them pennies to make, instead of having that user listen to real artists, that will ask for actual pay in exchange for their streams. They’re not paying a little bit to make alot, they’re paying a little bit to avoid paying even more. It’s basically average desk job employee outsourcing their work to indians who get like a dollar a day and are happy with it cus it’s their only option
I don’t think it’s Spotify. Spotify already gets their cut, they have no reason to put out “fake music”. This is a very well known “passive income” scheme. It’s obviously real people doing it
Not that it justifies what Spotify are doing, but the terms they have with the big record companies make it virtually impossible for them to increase their margins through other means. They lose $500m a year as it is.
i understand entirely, it just felt like a good opportunity to say how spotify is trying to enlarge their size of the moneypie by eating out of hardworking musician’s cut and simultaneously filling user’s playlists with bloat
Nothing wrong with what the man did
They’re just jealous they didn’t get a cut
The advertisers who spent 10m usd on fake “customers” disagree…
Yeah I have no sympathy for advertisers, but this seems like it’s pretty clearly fraud.
Fuck 'em
Is stealing okey just when you steal from others, or are you also okey with others stealing from you?
It’s okay when you hurt rich people and corporations
Where do you live and how much money do you have? If you have more than me by any chance, I would like to steal some from you, I hope that ok with you.
That is not okay with me and is not a contradiction either. I am nowhere near rich. Are you getting paid to deepthroat the boot or do you just enjoy it?
I am nowhere near rich.
You have the internet and some kind of computer, which means you are more rich than lot of other people on earth. Does that mean all of them can steal from you, because you are rich? Or are you just a piece of shit trying to justify why it is ok for you to steal, hoping for protection from others at the same time?
Are you getting paid to deepthroat the boot or do you just enjoy it?
I am just teasing idiots for fun. But if you knew someone who would pay for this, don’t hesitate to let me know.
Where do we draw the line for “rich people?” You can’t just have a system where you can hurt and steal as much as you want from rich people. What you’re describing is closer to a revolution, and carrying that idea to its conclusion usually involves a ton of bloodshed and putting new people in power who are just as bad.
You’re right, because they shouldn’t exist at all. No rich people, no need to draw a line. Thanks for making this so simple!
No rich people, no need to draw a line.
If you want to deny rich people existence, you have to define what rich means, so there is pretty clear need to draw a line.
See, you cant even deliver your stupid thiefy argument correctly.
Thanks for making this so simple!
They didn’t make it simple, they just showed you that you are so simple that you can’t comprehend any kind of at least slightly complex topic.
Don’t worry about it, go back to your young communist lego or something.
Am i supposed to feel sorry for poor ol’ RIAA being ripped off? 'Cos i’m not.
What a smart use of the system. too bad for him.
But when corporations do this, they are praised for brilliant innovative fiduciary prowess. 🙄
So OpenAI is revolutionary but this guys a criminal? wtf?!
The main difference is who your mates are.
Isn’t that all that Facebook and Twitter is though?
Hey can I do this but just enough to feed my family and keep my house ? I don’t need 10 million 100k a year would do just fine for me !
Thank God the government is here to protect us from dangerous people like this man. /s
Every day the Butlerian Jihad looks more and more enticing.
