Spotify to charge $10 per song for fake streams
As part of a slate of changes early next year that will reshape how Spotify pays royalties, the streamer will charge labels and distributors for every song with a substantial number of fraudulent streams.
Under the new rules, Spotify will charge 10 EU / USD 10.82 when more than 90% of streams on a song are fake, according to multiple sources. The penalties come in addition to other actions Spotify takes when fraudulent streams are identified, including, in some instances, removal.
“It’s as if Spotify implies that boosting existing streams by 50% – 60% is OK.”
Staying under the 90% threshold will be easy for major artists with significant streams while adding additional punishment to discourage emerging artists from using the banned practice.
One label marketer contacted by Hypebot questioned why the bar was set so high. “It’s as if Spotify implies that boosting existing streams by 50% – 60% is OK.”
DistroKid, TuneCore, and CD Baby
Large self-service D.I.Y. distributors like DistroKid, TuneCore, and CD Baby will likely be the most affected since the sheer volume of their unvetted uploads will be difficult to police. With entry-level distribution often priced at $10 or less, these fines could prove problematic.
Most distributors are publically supporting the fines and plan to pass them on to the offenders, including dinging any royalties.
Only one pushes back
But one behind-the-scenes detractor appears to be DistroKid founder and CEO Plill Kaplan, whose service may account for 30-40% of all tracks uploaded daily.
During a recent of the Music Fraud Alliance, Kaplan reportedly pushed back, and another exec on the call paraphrased his comments for Billboard. “We can’t determine if a new client is going to hire a marketing service that’s going to bot streams until they’ve done it. It’s like you can’t determine if your neighbor is going to commit a crime.”