““Streaming fraud redirects a portion of the existing royalty pool from every single legitimate rightsholder to fraudsters,” the feds wrote. “Musical royalties that Smith fraudulently obtained came at the expense of the creators whose rightful royalties were siphoned away because every fraudulent stream perpetrated by Mr. Smith diluted the value of every legitimate stream.””
Feds Say AI Music Fraudster Deserves Prison For Stealing Royalties From ‘Hard-Working Songwriters’billboard.com
This is the sentence I wish every listener understood about how streaming pays. There is no per-play rate coming out of a bottomless account. There is one pot, split by share of streams. Every fake stream makes every real one worth a little less, mine included. Prosecutors finally put it in a filing in plain words.
““The effect each individual stream of one artist’s song has on every other artist’s share of total streams is not akin to a drop in a proverbial bucket – it is a drop in an ocean,” Smith‘s lawyers write, according to Billboard.”
Man who pocketed $8m using AI songs and bot streams asks for no prison time, arguing ‘no artist suffered any perceptible harm’musicbusinessworldwide.com
His lawyers’ answer, from a week earlier. A drop in an ocean. Per artist, sure. But he forfeited more than $8 million, and it came out of the same ocean the rest of us get paid from.
““Streaming fraud is … a systemic problem rooted in the structure of the digital royalty system itself,” Smith’s attorneys add. “No custodial sentence imposed on an individual American defendant can eliminate the incentives that drive billions of dollars in fraudulent activity worldwide.””
AI Music Fraudster Wants No Prison for $8M Scam: ‘No Victim Suffered Any Real Harm’billboard.com
The uncomfortable part is that I half agree with this. The system rewards volume over listening, and his lawyers say big labels and publishers game it too. I don’t doubt fake streams are everywhere. But “everyone does it” is an argument for fixing the payout model and for catching more people, not for sending the first person convicted home on probation.
“Wire fraud conspiracy carries a five-year maximum prison sentence, and federal guidelines call for between 46 and 57 months in Smith’s case. But federal probation officials recommended a lighter sentence of 24 months.”
Feds Say AI Music Fraudster Deserves Prison For Stealing Royalties From ‘Hard-Working Songwriters’· billboard.comFor scale: guidelines say 46 to 57 months, probation officials say 24, his lawyers say none.