Experiences with Spotify's New Policy

Spotify has introduced a new deterrent to combat artificial streaming, effective April 1, 2024, charging labels and distributors per track when flagrant artificial streaming is detected on their content.

 

Musician unions, like the Musicians' Union (MU) and other industry bodies, have expressed mixed reactions to Spotify's new anti-fraud measures, particularly the "artificial stream fees." While these measures are aimed at deterring fraudulent streaming, they could also impose financial penalties on artists, labels, and distributors found guilty of such activity.

 

The Musicians' Union has generally welcomed efforts to combat fraud and bring more transparency to the platform, aligning with their ongoing campaigns for fairer compensation for artists. They see the move as beneficial in curbing practices like "stream farms" that manipulate play counts, which unfairly impact the earnings of honest artists.

 

However, there are concerns raised by the Musician Unions that legitimate artists, especially smaller and independent ones, might be penalized if their music is mistakenly flagged as fraudulent. The hope is that Spotify's enhanced fraud detection technologies will help avoid these issues and create a fairer environment for all artists.

 

Recently it became evident that the labels and distributors/aggregators back-charge the musicians contributing the content. Especially Indie musicians (non-labelled) are being directly confronted with significant penalties once Spotify detects artifical streaming activities. The distributors/aggregators charge between 10.- € and as high as 45.- €/artificial stream. This may sum up to several hundrets of penalties per month easily, while Spotify is paying only fractions of a €/stream themselves. The discrepancy between the penalties and payouts is up to 15.000x.

 

Some cases were reported where, in response to a menacing fake stream altert from Spotify, a distributor (AMUSE in that case) has removed the entire catalogue who were accused of fake streams - all arbitrary, without proof and any rights that normally exist in a constitutional state. The consequences of this could be significant for the victims of this practice, as this means having your livelihood flushed down the drain as the distributor wipes clean the entire catalog due to a potentially false fraudulent stream alert.

 

The Spotify policy claims, for example, to charge penalties or withhold royalties for streams found to be artificially generated. Spotify can even remove tracks from playlists or the playlists entirely in severe cases. However, according to information provided by Spotify's artist support team and the aggregators, the musicians are held responsible to ensure that their tracks are not placed on fraudulent playlists generating artificial streams. This is a responsibility that artists are barely able to take since it is not under their control, at least to a large extent. On the Spotify for Artists page, only a subset of playlists are listed - hence, the accused artist is even not empowered to check playlists for botted activities, even if they would invest the time and effort.

 

Some aggregators suggest to use an "artist tool" to check if playlists are botted or not:

 

https://www.artist.tools/?emailContactId=dGDZK5oXhnaivbZyr

 

Now, the question is why Spotify is not doing what they claim in their policy thereby ensuring a clean platform rather holding musicians responsible to ensure their content is not placed on fraudulent playlists?

 

Upon request at the artist team support, Spotify was not willing to disclose any details on how the artificial streams are being identified - that is a secret of the company, they said. Hence, there is no transparency on how Spotify is identifying these artificial streams. Moreover, no proof is provided to the distributors/aggregators nor to the musicians - a parking violation or speed limit violation has more proof and transparency!

 

An aggregator based in Germany shared the following criteria and information on the backgrounds upon request:

1. Number of streams within the last time;
2. Number of users streaming the album
3. Total number of streams/total number of users streaming the track
4. Number of tracks on the album
5. Number of “short” tracks on the album;
6. Number of “short streams”;
7. Territorial activity

Based on these parameters, the store recognizes artificial streams (unnatural streams) and then does not take them into account for the credits and penalizes them if they exceed 90% of the total streams in a month.

 

For example, it may be sufficient to play tracks in a continuous loop for several days or to purchase plays via various providers. From this point onwards, we no longer have the option of demanding payment of the artificial streams from Spotify or having penalties reversed.

 

The aggregators completely rely on Spotify's data as they are not enabled to cross-check. With that nobody seems to be able to control what Spotify is claiming in terms of artificial streams.

 

While Spotify has received significant attention for its "artificial stream fees," it is not the only platform dealing with this issue. Artificial streaming, where streams are inflated using bots, scripts, or other automated methods, is a widespread problem across many music streaming services. Most platforms, including Spotify, Apple Music, Tidal, Deezer, and others, have policies in place to combat artificial streams and impose penalties on artists or distributors involved in such activities.

 

However, no reports about back-charging penalties to musicians have yet been reported for other platforms than Spotify. In the following section, a real case illustrates the full extend of how Spotify's new policy is affecting indie musicians.

 

In summary, it appears that digital streaming providers, especially Spotify, struggle with mis-use of their platforms. Policies have been installed to fight against this. However, transparency is still lacking and the wrong and weakest party, the musician, is finally hold responsible to pay "the bill". Moreover, no proof is provided and the musicians put under general suspicion without any rights and possibility of objection.

 

Björn Ulvaeus (songwriter and musician, ABBA founder and CISAC president) recently stated in the GEMA / Goldmedia report 2022:

 

“If we accept that the song – or the creative work of any repertoire – is the foundation of our

creative industries, why do we then accept the near-invisibility of the creator in the commercial

value chain? These creators are where our creative industries start. Without their work, the global “creative sector”, worth billions of dollars, would just not exist.”

 

Moreover, the president of the European Composer & Songwriter Alliance (ECSA), Helienne Lindvall, stated in the ECSA report published July 2023:

 

"Music lovers can enjoy music at a very affordable price and streaming is booming for

record companies and streaming platforms. But this does not benefit songwriters and

musicians. We need to fix streaming. To do so, it must be put on the political agenda again

and again until we have a functioning industry that supports those delivering the core product: music."

 

Tobias Stenkjaer (ECSA Music Streaming Working Group Chair) contributed:

 

"In order to fix streaming and make it sustainable for music authors, we have to focus

on the bigger picture. This includes competition issues, the legal nature of a stream, and the current allocation of revenues per stream."

 

 

This Spotify policy established in April 2024 may turn out to be counter-productive for their own platform: Musicians, especially Indie musicians, contributing to a large portion of the content of the platform, may realize that their revenue are further reduced by the deducted artificial stream fees. This may lead, mid- to long-term, to Indie musicians turning away from the platform and no longer contributing their content and market it elsewhere or on a fairer platform.

 

Some Indie Bands like Anti-Social-Club and its Indie Label Dying Code Media already initiated their "Bye-Bye-Spotify" campaign by removing their content, leaving just the "Bye-Bye-Spotify" song on it and modifying their bio to call out Spotify's theft and asking listeners to help and consider canceling their subscription. This shows what damage may happen upon leaving the policy in place and transfering money from bottom to up.