There is some trouble brewing in France this week, and if recent findings are correct, they're probably not alone—or at least not for long. A new report coming out of the European nation is indicating that “at least" from 1 to 3 billion streams on DSP services like Spotify or Deezer were found to be “false” in 2021— accounting for as much as three percent of the market share for that entire year.
What's happening is that streams are being generated by typically very shady paid-for stream agencies in an attempt to skim royalties off legitimate artists. These agencies were called out as "bad actors" by Universal Music Group CEO Sir Lucian Grainge last week, taking the issue of streaming fraud public after seemingly bubbling under the surface for years.
"Now that the industry is growing again…. new players as well as some bad actors who do not share [UMG's] commitment to artists and artistry have been swooping [in]," Grainge wrote in a published industry letter.
The 2021 data was collected by the French group Centre National de Musique (CNM), a public civics service under the guidance of France's Ministry of Culture and Communication. Previously, the CNM had looked into the effects of fan-powered licensing of music in 2021.
For this current study, CNM had access to multiple data set from services such as Spotify and Deezer, as well as multiple international distributors including UMG, Sony Music, and the Warner Group.
But what does all this information mean in dollars and cents? A lot, actually. On the low end of the scale, nearly $6 million in fraudulent royalties have been paid out. But that's conservative: at worst case, that figure could actually be as high as $17 million.
Could it get even worse? You're going to wish you hadn't asked that, as the study makes a point of noting the data only represents those who were caught, suggesting the number of "bad actors," in the the words of Grainge, is far bigger than can be accounted for.
