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New code of conduct sets out to target the streaming stat scammers

By | Published on Friday 21 June 2019

Digital music services

The music industry has a long, proud history of developing, implementing and honing innovative, imaginative and occasionally ingenious ways of, erm, well, scamming the system, so it looks like the pop tunes you’re peddling are a fuck load more popular than they really are. But no more, people! Because now there’s a code of conduct to stamp out “stream manipulation”.

With the shift to streaming, of course, entirely new innovative, imaginative and occasionally ingenious ways of scamming the system were developed, implemented and honed. Which led to much chatter about certain specific ruses used to manipulate the number of streams being recorded for any one track. Ruses that usually involve employing people or machines to log into multiple accounts on the streaming platforms and give certain recordings lots of extra plays.

In many ways those ruses are just the digital era equivalent of buying your own CDs on an industrial level to boost chart position, bunging cash or goodies to radio programmers to ensure extra airplay, or having a room full of people phoning music telly channels to request your own music. So, basically new scams for a new era continuing a long tradition of scamming the system.

Although, there is an important difference with the cleverer streaming platform stat manipulation schemes. The old fashion scams were usually a cost centre, so a marketing expense to make an artist seem more popular in the hope it might help sell more records. However, the streaming scams can actually be revenue generating in their own right, because of the way the digital platforms share out their income with the industry.

Streaming monies are ultimately allocated each month based on total consumption share. So if 10% of all tracks streamed came from your catalogue, 10% of all revenues are allocated to your label, and then the streaming service shares that allocation with you according to your revenue share agreement. A label would see more than 50% of that cash.

As a result, if a scammer sets up a load of premium accounts and then sets those accounts just playing music that they themselves control – or which their clients control – then the money generated by the scammer’s consumption share could be significantly higher than what they laid out in subscription fees.

Because the scam can have direct financial benefits – as well as marketing kickbacks – it means you get scammers doing all this just to make a profit rather than as a dubious service to the music industry. Which is to say, they create a load of rubbish music themselves, pump it into the streaming services, set the machines listening, and wait for their share of the digital pie to come in each month. Make that rubbish music mainly 60 second tracks and your total consumption share and resulting pay-out will be even higher.

Scamming the system like this is against the terms and conditions of the streaming platforms, so the digital firms can cancel the accounts of the scammers. But to do that, they’ve got to spot them and they’ve got to care. They insist that they do, but some argue that the streaming companies should do much more in this domain, and that the music industry should be demanding tougher action all round.

Though for the music business to be making those demands, artists and labels within the industry can’t really be employing their own sneaky scams on the side. And the streaming sector then needs to take those demands seriously and also ensure that they themselves aren’t involved in any stat manipulation (hey Tidal? – allegedly, allegedly, allegedly).

Hence the new code of conduct published this week and signed by a bunch of record labels, music publishers, industry trade bodies and streaming services. The signatories state that stream manipulation can economically harm artists and music companies, whose own streaming income will likely drop if a slice of the digital pie is going to the scammers. Plus, they note, such manipulation can fuck up the listening experience of streaming service subscribers and the quality of data coming back to artists and their business partners.

To that end, the signatories say that they officially condemn stream manipulation. The music companies add that they will inform their staff and suppliers that they have a zero-tolerance policy regarding such activity and will seek to add monitoring for such scams to their ongoing anti-piracy endeavours. Meanwhile, the streaming firms say they will implement “a set of balanced, commercially reasonable measures and controls enabling the prevention and/or reduction of stream manipulation”.

Of course, you could debate as to exactly where you draw the line between legitimate marketing activity to boost streams and dodgy scamming activity to, well, boost streams. The code of conduct leaves some room for manoeuvre regarding where those lines might be drawn, keen to ensure that, by signing up to the code, labels aren’t forced to abandon marketing tactics that they actually consider to be legit. But it does also have a go at defining certain tactics that labels should never try to define as legitimate.

Among the organisations backing the code of conduct is the International Confederation Of Music Publishers, whose chief John Phelan provides further context as to why it has been created. “Manipulating streamed music causes economic harm to streaming services, right holders and musicians alike”, he said yesterday. “Any such manipulation distorts data and affects royalty streams for those who invest in, create and distribute music”.

He went on: “This code is a signal from across the industry of our determination to tackle it where it arises. The motivation is ever greater translation and fairness. The code contains measures to be taken by everyone in the industry to detect and mitigate against this problem. It’s great to see such collaboration from across publishing, labels and service providers”.

Also backing the move is pan-European indie labels trade group IMPALA, whose Executive Director Helen Smith added: “Streaming manipulation is costing the independents a fortune. Last year we commented on the situation with Tidal and that was just one example. It’s vital we all work together to ensure a fair and sustainable online world”.

Of course, one thing that would hinder the scammers – certainly in terms of the payback they get in streaming royalties – would be to shift to a user-centric royalty distribution system. That’s where, rather than total revenues being shared out based on service-wide consumption, each individual subscription payment would be split between the artists and songwriters whose music that specific subscriber streamed.

It would mean that scammers using premium accounts on the streaming services could only ever earn back the subs they had themselves paid, minus the digital firm’s cut. There are various pros and cons to the user-centric approach, and that is one of the definite pros. It wouldn’t stop all the scamming of course, but it would greatly hinder one particularly lucrative scam.

However, it doesn’t seem like a user-centric system is going to be adopted anytime soon. In the meantime, it will be interesting to see if the code of conduct makes any difference.