Back in May, California-based generative AI music startup Boomy found itself caught in a storm over streaming fraud.
Spotify reportedly pulled down tens of thousands of tracks from its service that had been made and distributed via AI-music-making platform Boomy – over concerns that said tracks were being used by scammers to manipulate Spotify’s payout model.
The Financial Times said that no less than 7% of tracks ever created on Boomy and then uploaded to Spotify were terminated.
Now, five months after that scandal hit, Boomy has made a significant move to reassure legitimate artists/rights-holders of the integrity of its platform.
Today (October 23), Boomy announced a partnership with blockchain-powered streaming content auditor Beatdapp.
Headquartered in Vancouver, with offices in Los Angeles and Toronto, Beatdapp claims that it can “find missing royalties and identify streaming fraud”.
According to Crunchbase, Boomy has to date raised USD $4.5 million from investors including Warner Music Group, Scrum Ventures, Sound Media Ventures, and First Check Ventures.
The company said today that it has integrated Beatdapp’s tech into its own distribution network to “verify the authenticity of every stream across all digital streaming platforms”.
As part of this partnership, Boomy and Beatdapp say that the latter company conducted an analysis of Boomy’s entire distributed catalog “to certify the Boomy platform and appropriately allocate entitlements owed to rights holders and content creators”.
According to Boomy’s co-founders, Alex Mitchell and Matthew Santorelli, “achieving Beatdapp certification and leveraging [the latter company’s] technology will provide certainty to DSPs”.
Boomy’s effort to reassure streaming platforms about the content created via its platform arrives amid heightened concern amongst both DSPs and major rightsholders about music streaming fraud.
Sony Music Group Chairman Rob Stringer for example, during Sony Group Corporation’s annual presentation to investors in May, said that, “Fraud on key DSPs is a problem that must be eliminated through aggressive enforcement by these DSPs and distributors, or by changing payment methods [i.e. royalty payout models] to better reduce the incentive for fraud”.
Stringer’s comments arrived in the same month that Spotify removed a substantial number of tracks – many created via AI music-making platform Boomy – from its service, citing “potential cases of stream manipulation”. (Boomy announced on May 6 “that curated delivery to Spotify of new releases by Boomy artists ha[d] been re-enabled.”)
“Boomy supports a new creative class of technology-enabled musicians, and we are dedicated to providing them with the best possible experience by ensuring the integrity of our platform.”
Alex Mitchell and Matthew Santorelli, Boomy
Boomy Co-Founders Alex Mitchell and Matthew Santorelli said: “Boomy supports a new creative class of technology-enabled musicians, and we are dedicated to providing them with the best possible experience by ensuring the integrity of our platform.
“Achieving Beatdapp certification and leveraging its technology will provide certainty to DSPs, allow our artists to be paid for their authentic streams, and help and support the long-term health of the creative economy.”
“By combining our technology with Boomy’s platform, we aim to safeguard the interests of Boomy creators and usher in a new era of trust within the music streaming landscape.”
Andrew Batey Morgan Hayduk, Beatdapp
Andrew Batey and Morgan Hayduk, Beatdapp’s Co-CEO’s, added: “We are thrilled to partner with the Boomy team, who shares our commitment to creating a transparent and equitable landscape for the next generation of musicians.
“Combating streaming fraud is among the most important priorities for the music industry today, with artificial streams extracting more than $2 billion from the industry annually, harming both artists and labels.
“By combining our technology with Boomy’s platform, we aim to safeguard the interests of Boomy creators and usher in a new era of trust within the music streaming landscape.”
Back in January, we reported on a recent French study showing that up to 3% of music streams on services like Spotify are known to be fraudulent.
That study suggested that, if those numbers are similar worldwide, artificial streaming amounts to theft worth between USD $175 million and $525 million annually. This is based on IFPI’s report that streaming was worth $17.5 billion in wholesale industry revenues worldwide in 2022.
Boomy’s new partner Beatdapp has suggested itself, however, that the share of streams that are fraudulent is closer to 10% – in which case the fraud is worth closer to $1.75 billion annually.
Last month, a bombshell report in Sweden raised a number of questions about the extent of fraud on music streaming platforms.
Svenska Dagbladet suggested that criminal gang members have used Spotify for money laundering. They allegedly do so by converting proceeds from criminal activities into Bitcoin via “cash-in-hand deals” with crypto traders they meet on Facebook.
They then use that crypto to acquire fake streams for artists with links to gangs and collect the money paid out for those streams.
Svenska Dagbladet reported that Spotify issued a statement claiming that “while there is more work to do”, its “automated processes and manual monitoring are market leading” and furthermore, that “less than one percent of all streams on Spotify have been determined to be tampered with”.
In June, France-born music streaming service Deezer set out a strategy to address both the rise of AI music and fraudulent streaming activity on its platform.
Deezer told MBW that, in 2022, around 7% of streams on the platform were detected as fraudulent.Music Business Worldwide
