REPORT: Artists Could Be Losing $300 Million A Year To Fake Streams

In the grand scheme of things, music streaming is still relatively new. Legislation is still catching up, and lord knows the labels are far behind. But technology waits for no one, and platforms keep making advancements that both benefit and, inadvertently, end up harming artists. A new report from Rolling Stone suggests that artists could be losing $300 million a year to fake streams on Spotify, although the reality of the situation is far more nuanced. The publication was made aware of the issue by Louis Posen, founder of the long-running California label Hopeless Records, who noticed a discrepancy in his company’s streaming numbers. After running the numbers himself, he found that six user-created and -manipulated playlists had accounted for 100% of the new streams to his label’s music.

By extrapolating these results with his own unnamed sources, Posen claims artists lose “around $300 million in potential lost revenue moved from legitimate streams to illegitimate, illegal streams.” The belief that legitimate artists lose money to illegitimate streams is based on the belief that there’s a “finite pot of revenue” in streaming, according to Bruce Houghton, who runs the music industry news site Hypebot.

“If any of that that goes to an illegitimate source [due to streaming manipulation], that’s a problem for [members of the independent community],” he told the crowd during a panel discussion about streaming manipulation at Indie Week. Streaming manipulation is not a new concept to the music industry, but it’s one that artists continue to fight against as they vie for their own place amongst several powerful playlists which drive a high percentage of plays to tracks worldwide. Rolling Stone likens stream manipulation to “the digital equivalent of steroids,” and it’s not entirely inaccurate.

Looking into these issues is still in its infancy; meanwhile, those who aim to manipulate streams and augment their plays for monetary gain continue to find new ways to game the system.

via Rolling Stone