An odd discovery on Spotify

> How do the scammers get the money if they use someone else's (stolen) identity and bank account?

Because if you have a stolen identity and open a bank account, as long as that account isn't trying to defraud the bank (e.g. write bad checks, commit ACH fraud), it can go on living for a long time before it's discovered and closed.

In this case, they opened up a bank account with stolen identity, and then used that to get their Spotify payouts, and then eventually transferred that to another account (cash, crypto, whatever). From that bank's perspective, unless they were specifically informed of the bad account, there wouldn't be a ton of unusual activity that would flag the account.

It is an awful side-effect of products getting bazaar-ified, where technology reduces friction in entering the marketplace and new "stalls" appear en masse. Human curation is a clear remedy - I can only listen to so much music or eat so many meals a day, so do I really need an algorithm to "optimize" that quantity?

I bet many listeners believe the Spotify-presented playlists are being curated, as if the stock image models in the thumbnail actually are jamming together and meeting with musicians face-to-face. So much of the recommendation service seems obfuscated to customers that I honestly don't understand what the end game is. Everyone is racing to just be "stickier" than their opponent that I can imagine a sudden pivot in customer demands where "Made for you" becomes a technology mistake akin to "Facebook Games"

In fairness, I'd bet that most of your favorite tunes would become very un-catchy if they were stripped of harmony and percussion, and played by a quantized, expressionless square wave

All they need to do is filter out content with genre=kids from recs. They could create a separate kids recommendation item if people actually want that.

I worked in music distribution and maintain a very active interest in this space. This is actually fairly unlikely to work, from three different standpoints: operational logistics of how money moves around; technical logistics; and economics.

I’m not saying that it never works - and I’m not saying that this was not happening in the past (in fact, it almost certainly was) but the chances of it happening today are really pretty low.

Here’s why - and I’ll also talk about what is more likely to be the reason for these tracks.

1. Operational Logistics

Although streaming activity is reported in real time Spotify accounts usage to labels and distributors in the middle of the month following the month in question. The label/distributor then invoices and receives payment. Depending on the deal the label or distributor has with Spotify they will be paid on a defined cycle. This may well be NET 30 EOM - meaning that when the distributor raises the invoice it will be paid 30 days after the end of the month in which it was raised.

2. Technical logistics

Both Spotify and distributors identify and flag unusual streaming activity. If you bot 1 million fraudulent streams this activity may well be removed in between the streams happening and payment being made. If a distributor sees sudden spikes in activity they may well hold payment until they can identify whether or not the streams are genuine.

Streaming fraud is a hot topic - and it’s obviously fairly easy to identify “non-human” activity when you have end to end control of the streaming platform.

Spotify has historically significantly reduced play count on tracks they think are botted: today I’d be surprised if many botted streams are even counted against tracks.

3. Economics

Essentially this is an arbitrage situation - can you get enough streams to drive more revenue than the amount you are paying for the fake streams?

The answer is almost certainly no.

Let’s say you’ve got 1000 accounts that are going to be your bot farm. There’s a lot of work is going to have to go into getting those accounts to stream in a human-like way.

Because Spotify does not have a user centric royalty model (where the subscription payments of a user go proportionately to the artists they stream) there is no fixed “amount per stream” - only broad indicators.

Streams from premium accounts pay a far higher rate than streams from ad supported accounts.

Roughly speaking a million premium streams is going to bring you somewhere in the region of $4000-5000 dollars.

If your bot farm is 1000 premium accounts then that’s costing you $10,000 a month. You’re going to have to have a certain amount of hardware - or hardware emulation - as if the streams on a certain track are all coming from web, and from the same network, that’s much more likely to flag than streams distributed across web, Spotify desktop app and Spotify mobile.

Now, sure, you can pay someone who already has the bot farm - but there are then three risks: first of all, that they take your money and run; second, that their bot farm gets flagged and the streams don’t pay through; third that Spotify doesn’t pay out on the streams.

So assuming that you’ve set up your own bot farm investing in 500 cheap android phones and doing the rest with emulation there’s a lot of cost - at least $10,000 a month.

Can you drive 5m streams a month? Well, each node in your bot farm would need to stream the track 5000 times a month. Is that going to look strange? For sure.

There’s also the question of finding distributors who are going to pay out easily and quickly if you can even convert the fraudulent streams to cash.

What is actually happening here? Well, mood music - ambient music, ambient electronic - is a really important part of the “make music happen” sell of Spotify. A lot of people don’t want to hear the hits. They want music to play while they work or run or cook or have a shower. And for these kinds of “activity driven” or “event driven” music it’s important that the flow of a curated playlist works.

You might have ten great tracks by known artists, but the transition between those tracks doesn’t work. Spotify has (according to media) begun commissioning songwriters to write these “filler” or “transitional” tracks. There was a huge tabloid storm whipped up about this by a music journalist some time back who said he’d unveiled a whole stable of “fake artists”. Spotify wants people to keep listening to music. I suspect - but have no direct insight into this - that people who listen to a lot of ambient playlists are particularly valuable subscribers - they will almost certainly be paying (as you don’t want your flow interrupted by ads) and they will almost certainly be over indexing against usage. They are probably also less likely to churn because of the lock in of saved playlists etc. It’s also quite likely that a lot of these custom transitional tracks are not available on other platforms so you may not even be able to replicate a saved playlist.