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Fraud groups take billions of dollars a year out of the music industry through fake streams, a streaming technology company has warned.
At least 10% of all song streams are fraudulent, and this takes between $2bn and $3bn (£1.6bn and £2.4bn) out of the global music industry each year according to Beatdapp, the streaming fraud detection platform.
Global streaming jumped by a third last year with 7.1 trillion song streams recorded in 2023, according to the latest figures published by Luminate, the music data provider.
The revenue from streaming was $19.3bn in the same year, according to the International Federation of the Phonographic Industry, which represents the global recording industry.
Streaming makes up more than two thirds of the industry‘s revenue, the research found.
Andrew Batey and Morgan Hayduk, the co-chief executives of Beatdapp, said that all stakeholders in the digital music supply chain lose money to fraud because it is taking from the pool of money, generated through subscription fees and advertising revenue, that gets paid out based on streaming plays.
Fraud groups work by pretending to be artists, uploading millions of songs onto streaming services and playing them from fake accounts or from real accounts using stolen account details.
By doing so, they collect royalty payments that would have otherwise gone to those who hold the rights to songs by real artists.
Batey and Hayduk said Beatdapp, which works with the Universal Music Group label and the streaming service Napster, tracks streams by measuring a range of different metrics given to them by streaming companies to identify streaming habits and detect fraudulent ones.
“No one notices that a few pennies are going to this song and a few pennies are going to that song but, in aggregate, they can steal billions of dollars,” they said.
“That money would have gone to real artists that would have been used to pay out managers and agents and…
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