It's not clear that this is illegal. Violating a site's terms of service isn't criminal hacking.[1] That's been decided by a court. It's more like financial engineering.
This person did create music: "24. The AI technology that CC-3 used to generate AI songs for MICHAEL SMITH,
the defendant, improved over time, making it less likely that the Streaming Platforms would detect
the scheme. For example, in an August 17, 2020 email, CC-3 wrote to SMITH, "Song quality is
10x-20x better now, and we also have vocal generation capabilities. . . . Have a listen to the
attached for an idea of what I'm talking about."
They paid for thousands of accounts on Amazon, Spotify, etc. to stream music. Those accounts were paid for with real money, not stolen credit cards.
That streaming can generate a bigger royalty bill than the payments required to receive the content is a business model problem at the streaming companies.
There's tons of precedent for click fraud on traditional ad networks being classed as criminal wire fraud, with multi-year prison sentences getting handed out for it, and faking music streams to get a bigger cut of Spotify's ad revenue is just click fraud with extra steps.
Not a lawyer but while the streaming seems to be fraudulent, it's less obvious from the evidence presented that the generation itself was. Does anyone believe this sets a precedent for generated content in specific?
Ed: oops I see the charges have specific quotes about intent to evade detection
Maybe it will turn out to be legally permitted “financial engineering” but considering they are accused of fraud, this Stringer Bell Rule violation doesn’t look good:
> For example, on or about December 26, 2018, SMITH emailed two coconspirators that, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.”
He was encountering challenges defeating their "anti-fraud" technology. Thus he knew it sounded like fraud to the victim services, and he did it anyway, defeating the controls they placed to verify the clicks were legitimate.
I understand your point but it misstates the issue:
> For example, on or about December 26, 2018, SMITH emailed two coconspirators that, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.
They are referring to anti-fraud policies as a general thing across all streaming platforms, not a specific named filter used by Spotify/Amazon/etc. Since they are referring to the policies by the intent rather than name or generically as ToS, this indicates an awareness that their behavior was ultimately fraudulent.
I understand it would be very different if the conspirators said “evade Spotify’s dumb ToS policies” and later Spotify said “actually those aren’t mere ToS, those are anti-fraud policies.” That’s not what happened.
They're naming those policies. That's what they are called by the platforms, and that's what "fraud detection" means in these cases. This is an "engineering" definition of fraud.
In the legal sense of the term fraud detection is impossible, since these platfroms are not measuring the intentions of users.
Outside of literal cults and criminal organizations, I can't think of an industry that has duped, robbed, swindled, abused, and destroyed people at the same pace as the music industry. And generally, it is just hand-waved over in court.
So someone arbitraged the cost of receiving + uploading a stream against Spotify's payment terms?
Would this have made any difference if a person was listening to those streams?
The fundamental "problem" for Spotify is that this arbitrage exists. It's unclear if any analogous behaviour would count as fraud.
Eg., if a taxi company pays $x/mile, and fares are $y/mile, and f(x - y) is "just right", I can drive around with an empty taxi and make money.
It "feels" like fraud because it's free money, which is basically what arbitrage is -- but in most cases we think its the market's problem to fix, not a legal one.
If this approach involved paying for lots of user accounts, using those accounts to stream music, uploading that music yourself, generating that music etc... then there shouldn't actually be a problem. You have paid for the songs you've listened to.
So spotify should have, in place, some system to stop users listening to more songs than their subscription covers. If they arent doing this, then the law isn't going to help. Their biz model has a clear iteration-to-zero in it.
It's the same situation as if you built WordPress websites using ChatGPT ("auto blogs"), registered them on Google AdSense and ordered bots to visit your website and click on your ads.
No, because here to listen to music on Spotify you pay a subscription price. You're paying Spotify to download music, they're paying you to upload music. There's an arbitrage in that pricing model which means you can pay less to down load than you earn from upload. There's no reason that should be possible. It's only like that because they're burning investor money to fund it.
The answer is for Spotify to properly manage downloading so that people who download music are actually paying for it.
If you need 100 accounts to download 1,000,000 plays then whatever Spotify has to payout for those plays has to come from those 100 accounts. Whether those accounts are bots or actual people doesn't change the irrationality and going-to-zeroness in the business model.
EDIT: Unless they're using ad-funded free-to-play accounts, which is more of a problem. Specifying exactly what the fraud is here is difficult. They arent providing music deceptively, they arent fraudently downloading it -- it may be against TOS, but spotify isnt being sold anything in that download. If there's some sort of hybrid-way of talking about fraud here, its really across both actions (uploading knowing that users wont listen to ads?) and (downloading without listening to ads?).
It comes down to exactly what transaction terms we think are implied in the upload. You're not selling something to spotify. Likewise, when you download, you arent buying anything.
You're overthinking this. From the indictment (page 4):
> at relevant times to this Indictment, a Manhattan-based music distribution company ("Distribution Company-1 ") [...] required customers, such as SMITH, to "agree not to engage in (or to permit, encourage, enlist, retain, or employ third parties to engage in) [...] any activity and/or method which involves the artificial creation, by human or non-human means, of online or offline plays on audio and/or audio-visual streaming services, where such plays do not represent bona fide end-user listening and/or views initiated by genuine consumers and taking place in the reporting country."
Moreover, the arbitrage available here doesn't really have anything to with "burning investor money". Aside from the fact that Spotify has been profitable so far in 2024, this fraud would be possible even if they had been profitable during the whole time the fraud had been carried out: it doesn't require that Spotify's royalty outlays be greater than their subscription/ad revenues in the aggregate. Rather, it relies on the fact that royalties are calculated in terms of total streaming volumes, but subscription prices are volume independent.
So while it's possible for a single individual to abuse the system and generate more royalties for themselves than what they pay in subscription revenues, it wouldn't work as a method in the aggregate for Spotify users to en masse produce royalties that exceeded streaming revenues. Even in unprofitable years their revenues greatly exceed their royalty payments. E.g., Spotify reportedly paid out $9B in royalties for 2023, on over $14B of revenue. At that point they were still operating at a loss due to R&D, marketing/sales, and administrative expenses, but that's all quite aside from their royalty calculation system.
"streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming"
So at the end of cases like this if they can recover the "damage" cause by the fraud will the artists get a compensation based on recalculated stats or the streaming company just pockets the money?
I know in cases of ad click frauds sometimes Google compensates but that's a little different and I'm curious if there was cases for this on streaming platforms.
> SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song. SMITH was aware that if, for example, a single song was streamed one billion times, it would raise suspicions at the Streaming Platforms and the music distribution companies that those streams were the result of streaming manipulation. A billion fake streams spread across tens of thousands of songs, however, would be more difficult to detect, because each song would only be streamed a much smaller number of times. As a result, SMITH repeatedly identified the need for more songs as crucial for facilitating the fraud scheme. For example, on or about December 26, 2018, SMITH emailed two coconspirators that, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.”
What kind of AI generating music tech were they likely to have been using in 2018?
AI has very little do with it. You can take any MIDI file, randomize it and call it "music". Artistic freedom. Streaming services do not validate file content at all, or at least did not in the past. They only care about copyright infringement.
For those that are arguing that this is simply a legal arbitrage, or financial engineering of some sort, I suggest reading the actual indictment. From page 4:
> at relevant times to this Indictment, a Manhattan-based music distribution company ("Distribution Company-1 ") [...] required customers, such as SMITH, to "agree not to engage in (or to permit, encourage, enlist, retain, or employ third parties to engage in) [...] any activity and/or method which involves the artificial creation, by human or non-human means, of online or offline plays on audio and/or audio-visual streaming services, where such plays do not represent bona fide end-user listening and/or views initiated by genuine consumers and taking place in the reporting country."
The issue here is not a TOS violation on the subscriber side. Smith had an obligation not to engage in streaming manipulation as an artist receiving royalty payments, and deliberately skirted that obligation (while attempting to conceal his activity) with the intent of inducing Spotify to pay him royalties which he was not legitimately owed. That's fraud.
> So my take is that music streaming platforms do zero quality control.
Where's the line between that and requiring every service that allows media uploads to build a YouTube-esque content ID system, that would cost north of €/$/£100m and still be inaccurate/gameable?
inb4 "extracting monetary value" - can you come up with a fair definition that still clearly and unambiguously allows e.g. an aspiring opera singer to upload a demo of their own performance with their CV/application?
20th century's ideas of copyright have so far scaled incredibly poorly into the digital age. 30 years ago nobody expected an average (but highly motivated) Jane/Joe to be able to afford recording an album OR launching a company literally from their bedroom, yet both are now everyday occurrences.
Way 1 is to say that x% of what you pay goes to the artists and that the streaming service takes the rest, no matter how many songs you play.
This makes no sense; this would cause a Taylor Swift fan that listens to her for hours on end, but also listens to other music sometimes, to pay less to Swift than somebody who just plays one Swift song per month and nothing else.
Way 2 is to pay a set amount per play, but make sure that the amount is low enough that if you play music for 24 hours a day, 7 days a week, the payouts are still less than what you paid for the service.
Most people don't listen to music for that long, so this makes artist payouts unrealistically low.
Way 3, which is what services actually do, is to have a much higher per-play rate and assume that users listen to n songs a month on average.
There will be some users who listen to a lot more, and you will take the loss on them, but by the law of large numbers, you will make an overall profit.
This is predicated on the fact that nobody "cheats" the service and misrepresents how much music they've been listening to. If you fraudulently tell Spotify that you've listened to your own songs 10m times this month, you make a lot of money.
> Way 3, which is what services actually do, is to have a much higher per-play rate and assume that users listen to n songs a month on average.
What's your source of this? I thought that all money is pooled, and then divided by total play statistics - i.e. actually numbers, not assumed values based on some guessing in advance as you suggest. That would make their business super risky. Imagine there's a holiday season and everyone listens double the usual amount. That could bankrupt a streaming company. Also, their incentives would be to discourage users of playing music, and we don't see any evidence of it.
> Way 1 is to say that x% of what you pay goes to the artists and that the streaming service takes the rest, no matter how many songs you play.
> This makes no sense; this would cause a Taylor Swift fan that listens to her for hours on end, but also listens to other music sometimes, to pay less to Swift than somebody who just plays one Swift song per month and nothing else.
This makes total sense for me as a consumer - I want my money to go exactly to the artists I'm listening to. I don't want any of my money to go to Taylor Swift or any other artist I don't care about. There are several benefits to this model:
- it would benefit small niche artists who have couple hundreds devoted fans. Maybe it would make it possible for some of them to live off the streaming, instead of getting pennies. It would reduce payouts to super starts, but I don't care about that since I'm the one who's paying and I vastly prefer that my money goes to who I want
- it would be inherently more fair than the existing model
- it would absolutely eliminate any kind of fraud as described here. You won't be able to invest $100 and receive $200 by manipulating numbers, you could only receive $100 - streaming fees
> Way 1 is to say that x% of what you pay goes to the artists and that the streaming service takes the rest, no matter how many songs you play.
> This makes no sense; this would cause a Taylor Swift fan that listens to her for hours on end, but also listens to other music sometimes, to pay less to Swift than somebody who just plays one Swift song per month and nothing else.
If I'm understanding the first quoted paragraph correctly, the second is not necessarily the result.
Say I'm paying $10/month to the streaming service and they pay $7/month to the artists no matter how much or how little I play.
Whether or not the second paragraph holds depends on how they distribute that $7/month among artists. They could for example take that $7, divide it by the number of songs I listened to that month, and pay each artist I listened to that amount times the number of their songs I listened to. In that case the result would be that your described.
Another way they could decide the value of a song is by taking the total amount they have to distribute, $7 x the number of subscribers, divided by the total number of songs listened to, and pay each artist that times the number of plays of their songs. Let's call that amount per play a share. In that case a person who only listens to one song a month and that song is a Swift song causes Swift to get one more share than She would have if they had not played any Swift songs. A person who listens to many Swift songs in a month causes here to get many more shares than she would have if they had listened to no Swift songs. The results is not what is described in your second paragraph.
afaik Spotify does none of those ways. They take the total amount of money earned per time period and divide it to artists based on the total_artist_playcount / total_playcount in that time period, after taking their own percentage cut. It's closest to Way 1, with the difference that you can listen to whatever - if Taylor Swift is the most popular artist right now and gets, say, 1% of all plays then 1% of your subscription will go to Swift.
> The fraudulent behaviour is on the part of the streamers.
He was also coordinating the botnet streamers. From the first sentence of the first paragraph of TFA:
> a scheme to create hundreds of thousands of songs with artificial intelligence and use automated programs called “bots” to stream the AI-generated songs billions of times.
On a completely unrelated note, I call for the repeal of the HN rule that forbids me from calling out commenters for having not read the first sentence of the first paragraph of the fine article.
rightbyte, your laziness contributes nothing to this forum and it would be better if you deleted your account. Your comment was bad and you should feel bad.
The AI bit of the story is a bit of alarmist spin. As alleged he simulated traffic to music streaming sites and received royalty for it, even though no one created the music being "played" and no one was really listening. It's quite fraudulent on the face of it.
AI allowed him to avoid detection for a long time. It allowed him to create thousands of songs so that the each one would only get moderate amounts of streams thus not raising suspicion.
Had he created songs by hand they would rack up millions/billions of botted streams but them not being international hits anyone had ever heard before would have made it obvious botting behaviour.
What about the "Musician" part? Seems like the headline should be "AI Musician aided by Computer Programmer in Complex Artificial Streaming Scheme" or similar
This would be a very dumb way of phrasing the situation, because the “AI musician” doesn’t have any understanding what the scheme is, it was entirely a plan of the human conspirators. It’s exactly as childish and stupid as saying “gun aided by human shooter in murder.”
> SMITH, 52, of Cornelius, North Carolina, is charged ... and money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
Would love to see the money laundering explain. From the indictment it seems to claim that its inviolation of "Title 18, United States Code, Section 1956(a)(1)(B)(i)." Which states "to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or" [1].
So, receiving money from unlawful activity counts as money laundering? That seems to be at odds with my layman definition of it. Like it just seems like a double-jeopardy violation, you commit fraud for money and get dinged for both fraud and money laundering from the same crime?
Sounds like he also tried to launder the profits of the fraud. If you set up a bunch of different bank accounts registered to different names or LLCs to collect all the profits of an illegal scheme so it doesn't look like a huge amount of money in each account, that's an additional money laundering charge versus if you put all the profits from a scheme in the same bank account.
It's not clear that this is illegal. Violating a site's terms of service isn't criminal hacking.[1] That's been decided by a court. It's more like financial engineering.
This person did create music: "24. The AI technology that CC-3 used to generate AI songs for MICHAEL SMITH, the defendant, improved over time, making it less likely that the Streaming Platforms would detect the scheme. For example, in an August 17, 2020 email, CC-3 wrote to SMITH, "Song quality is 10x-20x better now, and we also have vocal generation capabilities. . . . Have a listen to the attached for an idea of what I'm talking about." They paid for thousands of accounts on Amazon, Spotify, etc. to stream music. Those accounts were paid for with real money, not stolen credit cards.
That streaming can generate a bigger royalty bill than the payments required to receive the content is a business model problem at the streaming companies.
[1] https://arstechnica.com/tech-policy/2020/03/court-violating-...
There's tons of precedent for click fraud on traditional ad networks being classed as criminal wire fraud, with multi-year prison sentences getting handed out for it, and faking music streams to get a bigger cut of Spotify's ad revenue is just click fraud with extra steps.
Not a lawyer but while the streaming seems to be fraudulent, it's less obvious from the evidence presented that the generation itself was. Does anyone believe this sets a precedent for generated content in specific?
Ed: oops I see the charges have specific quotes about intent to evade detection
Maybe it will turn out to be legally permitted “financial engineering” but considering they are accused of fraud, this Stringer Bell Rule violation doesn’t look good:
> For example, on or about December 26, 2018, SMITH emailed two coconspirators that, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.”
Fraud is defined as deception in a business transaction for financial gain.
But nobody charged him with hacking.
Sounds like wire fraud, which is illegal.
He was encountering challenges defeating their "anti-fraud" technology. Thus he knew it sounded like fraud to the victim services, and he did it anyway, defeating the controls they placed to verify the clicks were legitimate.
So, if I hire a bunch of employees to enforce a sites ToS and call that team the Anti-Fraud team then anybody breaking my ToS is guilty of fraud?
The guy lied for financial gain. That makes it fraud. An argument about "defeating anti-fraud technology" is not the leg you want to stand on.
I understand your point but it misstates the issue:
> For example, on or about December 26, 2018, SMITH emailed two coconspirators that, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.
They are referring to anti-fraud policies as a general thing across all streaming platforms, not a specific named filter used by Spotify/Amazon/etc. Since they are referring to the policies by the intent rather than name or generically as ToS, this indicates an awareness that their behavior was ultimately fraudulent.
I understand it would be very different if the conspirators said “evade Spotify’s dumb ToS policies” and later Spotify said “actually those aren’t mere ToS, those are anti-fraud policies.” That’s not what happened.
They're naming those policies. That's what they are called by the platforms, and that's what "fraud detection" means in these cases. This is an "engineering" definition of fraud.
In the legal sense of the term fraud detection is impossible, since these platfroms are not measuring the intentions of users.
>"The guy lied for financial gain. That makes it fraud."
Isn't lying for financial gain is what almost any company does?
My bank sells CDs to me, at a rate that's clearly disclosed to me. What type of "lying for financial gain" is happening here?
(And that is of course what is actually alleged in the indictment.)
I couldn't read this beyond, "... played upon the integrity of the music industry...".
Outside of literal cults and criminal organizations, I can't think of an industry that has duped, robbed, swindled, abused, and destroyed people at the same pace as the music industry. And generally, it is just hand-waved over in court.
So someone arbitraged the cost of receiving + uploading a stream against Spotify's payment terms?
Would this have made any difference if a person was listening to those streams?
The fundamental "problem" for Spotify is that this arbitrage exists. It's unclear if any analogous behaviour would count as fraud.
Eg., if a taxi company pays $x/mile, and fares are $y/mile, and f(x - y) is "just right", I can drive around with an empty taxi and make money.
It "feels" like fraud because it's free money, which is basically what arbitrage is -- but in most cases we think its the market's problem to fix, not a legal one.
If this approach involved paying for lots of user accounts, using those accounts to stream music, uploading that music yourself, generating that music etc... then there shouldn't actually be a problem. You have paid for the songs you've listened to.
So spotify should have, in place, some system to stop users listening to more songs than their subscription covers. If they arent doing this, then the law isn't going to help. Their biz model has a clear iteration-to-zero in it.
It's the same situation as if you built WordPress websites using ChatGPT ("auto blogs"), registered them on Google AdSense and ordered bots to visit your website and click on your ads.
It is clear fraud.
No, because here to listen to music on Spotify you pay a subscription price. You're paying Spotify to download music, they're paying you to upload music. There's an arbitrage in that pricing model which means you can pay less to down load than you earn from upload. There's no reason that should be possible. It's only like that because they're burning investor money to fund it.
The answer is for Spotify to properly manage downloading so that people who download music are actually paying for it.
If you need 100 accounts to download 1,000,000 plays then whatever Spotify has to payout for those plays has to come from those 100 accounts. Whether those accounts are bots or actual people doesn't change the irrationality and going-to-zeroness in the business model.
EDIT: Unless they're using ad-funded free-to-play accounts, which is more of a problem. Specifying exactly what the fraud is here is difficult. They arent providing music deceptively, they arent fraudently downloading it -- it may be against TOS, but spotify isnt being sold anything in that download. If there's some sort of hybrid-way of talking about fraud here, its really across both actions (uploading knowing that users wont listen to ads?) and (downloading without listening to ads?).
It comes down to exactly what transaction terms we think are implied in the upload. You're not selling something to spotify. Likewise, when you download, you arent buying anything.
You're overthinking this. From the indictment (page 4):
> at relevant times to this Indictment, a Manhattan-based music distribution company ("Distribution Company-1 ") [...] required customers, such as SMITH, to "agree not to engage in (or to permit, encourage, enlist, retain, or employ third parties to engage in) [...] any activity and/or method which involves the artificial creation, by human or non-human means, of online or offline plays on audio and/or audio-visual streaming services, where such plays do not represent bona fide end-user listening and/or views initiated by genuine consumers and taking place in the reporting country."
Moreover, the arbitrage available here doesn't really have anything to with "burning investor money". Aside from the fact that Spotify has been profitable so far in 2024, this fraud would be possible even if they had been profitable during the whole time the fraud had been carried out: it doesn't require that Spotify's royalty outlays be greater than their subscription/ad revenues in the aggregate. Rather, it relies on the fact that royalties are calculated in terms of total streaming volumes, but subscription prices are volume independent.
So while it's possible for a single individual to abuse the system and generate more royalties for themselves than what they pay in subscription revenues, it wouldn't work as a method in the aggregate for Spotify users to en masse produce royalties that exceeded streaming revenues. Even in unprofitable years their revenues greatly exceed their royalty payments. E.g., Spotify reportedly paid out $9B in royalties for 2023, on over $14B of revenue. At that point they were still operating at a loss due to R&D, marketing/sales, and administrative expenses, but that's all quite aside from their royalty calculation system.
"streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming"
So at the end of cases like this if they can recover the "damage" cause by the fraud will the artists get a compensation based on recalculated stats or the streaming company just pockets the money? I know in cases of ad click frauds sometimes Google compensates but that's a little different and I'm curious if there was cases for this on streaming platforms.
This has been running for a long time:
> SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song. SMITH was aware that if, for example, a single song was streamed one billion times, it would raise suspicions at the Streaming Platforms and the music distribution companies that those streams were the result of streaming manipulation. A billion fake streams spread across tens of thousands of songs, however, would be more difficult to detect, because each song would only be streamed a much smaller number of times. As a result, SMITH repeatedly identified the need for more songs as crucial for facilitating the fraud scheme. For example, on or about December 26, 2018, SMITH emailed two coconspirators that, “We need to get a TON of songs fast to make this work around the anti-fraud policies these guys are all using now.”
What kind of AI generating music tech were they likely to have been using in 2018?
AI has very little do with it. You can take any MIDI file, randomize it and call it "music". Artistic freedom. Streaming services do not validate file content at all, or at least did not in the past. They only care about copyright infringement.
> What kind of AI generating music tech were they likely to have been using in 2018?
Techno demoscene style music. It's amazing what you can do with just 4kb.
For those that are arguing that this is simply a legal arbitrage, or financial engineering of some sort, I suggest reading the actual indictment. From page 4:
> at relevant times to this Indictment, a Manhattan-based music distribution company ("Distribution Company-1 ") [...] required customers, such as SMITH, to "agree not to engage in (or to permit, encourage, enlist, retain, or employ third parties to engage in) [...] any activity and/or method which involves the artificial creation, by human or non-human means, of online or offline plays on audio and/or audio-visual streaming services, where such plays do not represent bona fide end-user listening and/or views initiated by genuine consumers and taking place in the reporting country."
The issue here is not a TOS violation on the subscriber side. Smith had an obligation not to engage in streaming manipulation as an artist receiving royalty payments, and deliberately skirted that obligation (while attempting to conceal his activity) with the intent of inducing Spotify to pay him royalties which he was not legitimately owed. That's fraud.
So my take is that music streaming platforms do zero quality control. Not that fraudulent streams are right either.
> So my take is that music streaming platforms do zero quality control.
Where's the line between that and requiring every service that allows media uploads to build a YouTube-esque content ID system, that would cost north of €/$/£100m and still be inaccurate/gameable?
inb4 "extracting monetary value" - can you come up with a fair definition that still clearly and unambiguously allows e.g. an aspiring opera singer to upload a demo of their own performance with their CV/application?
20th century's ideas of copyright have so far scaled incredibly poorly into the digital age. 30 years ago nobody expected an average (but highly motivated) Jane/Joe to be able to afford recording an album OR launching a company literally from their bedroom, yet both are now everyday occurrences.
What was the fraud? Not listening to the ads? I guess he wasted bandwidth.
The fraudulent behaviour is on the part of the streamers. There should be no cross user account royalty dependecy.
There has to be a cross-user dependency.
There are 3 ways you can go about paying artists.
Way 1 is to say that x% of what you pay goes to the artists and that the streaming service takes the rest, no matter how many songs you play.
This makes no sense; this would cause a Taylor Swift fan that listens to her for hours on end, but also listens to other music sometimes, to pay less to Swift than somebody who just plays one Swift song per month and nothing else.
Way 2 is to pay a set amount per play, but make sure that the amount is low enough that if you play music for 24 hours a day, 7 days a week, the payouts are still less than what you paid for the service.
Most people don't listen to music for that long, so this makes artist payouts unrealistically low.
Way 3, which is what services actually do, is to have a much higher per-play rate and assume that users listen to n songs a month on average.
There will be some users who listen to a lot more, and you will take the loss on them, but by the law of large numbers, you will make an overall profit.
This is predicated on the fact that nobody "cheats" the service and misrepresents how much music they've been listening to. If you fraudulently tell Spotify that you've listened to your own songs 10m times this month, you make a lot of money.
> Way 3, which is what services actually do, is to have a much higher per-play rate and assume that users listen to n songs a month on average.
What's your source of this? I thought that all money is pooled, and then divided by total play statistics - i.e. actually numbers, not assumed values based on some guessing in advance as you suggest. That would make their business super risky. Imagine there's a holiday season and everyone listens double the usual amount. That could bankrupt a streaming company. Also, their incentives would be to discourage users of playing music, and we don't see any evidence of it.
> Way 1 is to say that x% of what you pay goes to the artists and that the streaming service takes the rest, no matter how many songs you play.
> This makes no sense; this would cause a Taylor Swift fan that listens to her for hours on end, but also listens to other music sometimes, to pay less to Swift than somebody who just plays one Swift song per month and nothing else.
This makes total sense for me as a consumer - I want my money to go exactly to the artists I'm listening to. I don't want any of my money to go to Taylor Swift or any other artist I don't care about. There are several benefits to this model:
- it would benefit small niche artists who have couple hundreds devoted fans. Maybe it would make it possible for some of them to live off the streaming, instead of getting pennies. It would reduce payouts to super starts, but I don't care about that since I'm the one who's paying and I vastly prefer that my money goes to who I want
- it would be inherently more fair than the existing model
- it would absolutely eliminate any kind of fraud as described here. You won't be able to invest $100 and receive $200 by manipulating numbers, you could only receive $100 - streaming fees
> Way 1 is to say that x% of what you pay goes to the artists and that the streaming service takes the rest, no matter how many songs you play.
> This makes no sense; this would cause a Taylor Swift fan that listens to her for hours on end, but also listens to other music sometimes, to pay less to Swift than somebody who just plays one Swift song per month and nothing else.
If I'm understanding the first quoted paragraph correctly, the second is not necessarily the result.
Say I'm paying $10/month to the streaming service and they pay $7/month to the artists no matter how much or how little I play.
Whether or not the second paragraph holds depends on how they distribute that $7/month among artists. They could for example take that $7, divide it by the number of songs I listened to that month, and pay each artist I listened to that amount times the number of their songs I listened to. In that case the result would be that your described.
Another way they could decide the value of a song is by taking the total amount they have to distribute, $7 x the number of subscribers, divided by the total number of songs listened to, and pay each artist that times the number of plays of their songs. Let's call that amount per play a share. In that case a person who only listens to one song a month and that song is a Swift song causes Swift to get one more share than She would have if they had not played any Swift songs. A person who listens to many Swift songs in a month causes here to get many more shares than she would have if they had listened to no Swift songs. The results is not what is described in your second paragraph.
> There has to be a cross-user dependency.
You could assign a pot per users and let the user distribute the pot according to some algorithm.
Assigning other users' pots to the suspect's bots seem like a rather bad algorithm.
If there was a per user pot, manipulation like the suspect did would give bogger all.
I guess the fundamental problem is that the streamers want to manipulate the royalties.
afaik Spotify does none of those ways. They take the total amount of money earned per time period and divide it to artists based on the total_artist_playcount / total_playcount in that time period, after taking their own percentage cut. It's closest to Way 1, with the difference that you can listen to whatever - if Taylor Swift is the most popular artist right now and gets, say, 1% of all plays then 1% of your subscription will go to Swift.
> The fraudulent behaviour is on the part of the streamers.
He was also coordinating the botnet streamers. From the first sentence of the first paragraph of TFA:
> a scheme to create hundreds of thousands of songs with artificial intelligence and use automated programs called “bots” to stream the AI-generated songs billions of times.
On a completely unrelated note, I call for the repeal of the HN rule that forbids me from calling out commenters for having not read the first sentence of the first paragraph of the fine article.
rightbyte, your laziness contributes nothing to this forum and it would be better if you deleted your account. Your comment was bad and you should feel bad.
Come on. It is not an article and I have read it.
My point is that I see the streaming payout scheme as fraudulent. It is a block box 'trust me bro'.
Clearly, it is possible to abuse it and the streamers want to be the ones doing it.
I understand perfectly well what the FBI and music industry think is the fraud. They wanted some other label to have the money.
He used bots and fake accounts to stream his own songs, thereby dishonestly profiting.
The AI is not really relevant except that it made the crime harder to detect.
The AI bit of the story is a bit of alarmist spin. As alleged he simulated traffic to music streaming sites and received royalty for it, even though no one created the music being "played" and no one was really listening. It's quite fraudulent on the face of it.
AI allowed him to avoid detection for a long time. It allowed him to create thousands of songs so that the each one would only get moderate amounts of streams thus not raising suspicion.
Had he created songs by hand they would rack up millions/billions of botted streams but them not being international hits anyone had ever heard before would have made it obvious botting behaviour.
What about the "Musician" part? Seems like the headline should be "AI Musician aided by Computer Programmer in Complex Artificial Streaming Scheme" or similar
This would be a very dumb way of phrasing the situation, because the “AI musician” doesn’t have any understanding what the scheme is, it was entirely a plan of the human conspirators. It’s exactly as childish and stupid as saying “gun aided by human shooter in murder.”
> it’s time for Smith to face the music.”
https://www.youtube.com/watch?v=Vdy8JYpTkr4
Does anyone know of any links to any of these slop songs?
At least the so called musician exposed the emptiness of AI generated content. It is so bad that only AIs "listen" to it.
I'd prefer if the "justice" department used its resources to go after those who launder intellectual property.
AI generated music isn't the issue. I'm pretty sure pop song production is tool-assisted.
> SMITH, 52, of Cornelius, North Carolina, is charged ... and money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
Would love to see the money laundering explain. From the indictment it seems to claim that its inviolation of "Title 18, United States Code, Section 1956(a)(1)(B)(i)." Which states "to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or" [1].
So, receiving money from unlawful activity counts as money laundering? That seems to be at odds with my layman definition of it. Like it just seems like a double-jeopardy violation, you commit fraud for money and get dinged for both fraud and money laundering from the same crime?
[1]: https://www.law.cornell.edu/uscode/text/18/1956
Sounds like he also tried to launder the profits of the fraud. If you set up a bunch of different bank accounts registered to different names or LLCs to collect all the profits of an illegal scheme so it doesn't look like a huge amount of money in each account, that's an additional money laundering charge versus if you put all the profits from a scheme in the same bank account.
What you described is exactly what real estate folks do. They put each property they own under a separate LLC.
There are legitimate reasons to use different bank accounts and legal entities to conduct business.
So the defendant needs to show that they had legitimate reasons for different accounts.
Alleged musician, surely.
"Person who broke into car aided by rogue hammer"
Is the music good?