AI on streaming services: The terrible Mr. Smith's eight million

R and 100,000 new songs are uploaded to Spotify every day. So if you just wanted to hear all of today's new releases - maybe there's a gem in there! – with an average song length of three minutes, you would have to do 208 days, assuming you go without sleep. During this time, however, 20,800,000 new titles would be added to the streaming service provider...

In any case, the Swedish company is doing well. It currently has around 780 million active users worldwide, around 300 million of whom have a paid premium subscription. With just 7,300 employees, the Luxembourg-based company generates an annual turnover of 17,186,000,000 euros. It is well known that such piles of money magically attract shady rabble. Some time ago, the producer and former judge of the hip-hop talent show “One Shot”, Michael Smith, came up with a business idea that was as simple as it was promising: He produced a bunch of songs with the help of AI, put them on Spotify (and other streaming services), concluded a large number of “Family plan” subscription contracts and then programmed an army of bots so that they retrieved his songs 24/7.

Rolling Stone found "that Smith used 1,040 accounts, each streaming approximately 636 of his AI-generated songs daily. That added up to 661,440 streams per day - potentially earning him $3,307.20 daily, $99,216 monthly, and over $1.2 million annually." Smith has now been sentenced by a New York court to 18 months in prison and must pay back the profit of a good eight million US dollars.

Which makes me wonder: what exactly was the crime? Producing music with the help of AI is not a crime. Is there a law that prohibits taking out streaming subscriptions and then running programs that use these subscriptions? Is this the “fraud” (i.e. fraud) that is mentioned in the reasons for the judgment? Wouldn't it have been a scam if, instead of the bots, Smith had rented a call center in a low-wage country and hired a thousand people to play his songs in three shifts for a wage of one piastre a day?

Another question is: who was cheated here? The streaming services did not suffer any economic loss because they do not pay artists fixed rates per stream, as radio stations do when they play a song or record companies when they sell a record - they “pay out”: income minus costs minus profit margin is divided by the number of streams.

As a result of Mr. Smith's practice, the streamers didn't miss a cent, but the artists would have received a slightly higher share if the bots hadn't interfered. Will the eight million to be repaid by Smith now be distributed to the creatives?

The music industry is celebrating the verdict for other reasons: the use of bot armies to increase streaming numbers has long been common practice to push songs into the charts. If you act smarter than Smith - and you can expect that from professional PR service providers - it is difficult to prove, and the illegality of this practice was questionable for a long time. Now there's finally a ruling to rely on, and the fear of jail time may be convincing PR agents to use other tools. So that the music industry doesn't soon have its entire chart system blown up in its face.