David Israelite: Real Solutions Are Needed to Tackle Growing Streaming Fraud

As we approach the trial in the Copyright Royalty Board to determine songwriter streaming rates for 2028-2032, you can count on giant streaming services like Spotify, Amazon and Google to continue to try to find ways to pay songwriters less.

But in addition to determining the rates and terms for how much tech giants must pay the songwriters who make their businesses possible, the court will also have to consider what must be done to counter a darker side of how some are using digital music services: streaming fraud.

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The scale of streaming fraud is enormous and exacerbated by artificial intelligence (AI). One reason it’s a problem is simple math: Streaming services pay for musical works based on a percentage of revenue. From that pool, royalties are distributed proportionally based on plays.

This means payments made for fraudulent streams directly reduce the amount going to human composers and songwriters. The pie doesn’t grow, and fraudsters will take a bigger and bigger slice if we don’t put a stop to it.

In March of this year, the Department of Justice announced the guilty plea of a man named Michael Smith who created hundreds of thousands of songs with AI that were streamed billions of times. U.S. Attorney Jay Clayton stated, “Although the songs and listeners were fake, the millions of dollars Smith stole was real. Millions of dollars in royalties that Smith diverted from real, deserving artists and rights holders.” Weeks ago, Smith was  sentenced  to 18 months in prison.

And that’s just the tip of the iceberg. In 2025, Apple Music found  2 billion fraudulent streams on its platform. This year,  Deezer reported  that 90,000 fully AI-generated tracks were being uploaded to its platform every day and that up to 85% of the streams of those tracks are artificial. When Deezer identifies fraud, it excludes those streams from royalty payments. This is a great first step, and one that should be followed industry-wide.

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A lesser publicized threat is that of using fake streams to launder money — a tactic which has been used by criminal gangs for years — and even finance terrorism. Streaming fraud is a national security issue that has been supercharged by AI.

According to a  Guardian  story published in September 2023 that cited a report in the Swedish newspaper  Svenska Dagbladet , “Criminal gangs behind a rise in bombings and shootings in Sweden are using fake Spotify streams to launder money.”

“Criminal networks have for several years been using money from drug deals, robberies, fraud and contract killings to pay for false Spotify streams of songs published by artists with ties to the gangs,” the  Guardian  story continued. “They then get paid by the platform for the high number of streams, thereby laundering the money.”

According to the  Guardian , an investigative police officer told  Svenska Dagbladet  that “he contacted Spotify in 2021 to discuss the matter but the company never returned his call. ‘Spotify has become a bank machine for the gangs. There’s a direct link to the gangs and the deadly violence.’”

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(In response to the  Svenska Dagbladet  report, Spotify told  AFP  in a statement that manipulated streams were “an industry-wide challenge and Spotify has been working hard to address this issue.” It added, “Less than one percent of all streams on Spotify have been determined to be artificial and those are promptly mitigated prior to any payouts.” The company also said it wasn’t aware of any contact made by law enforcement and that it had not found “any data or hard evidence that indicates that the platform is being used at scale in the fashion described.”)

The threat even bleeds into betting markets. According to Music Ally ‘s  The Price of Music  podcast, “people using prediction platforms like Kalshi are accused of artificially pumping track streams to win trades — risking account bans for innocent artists.”

The complex nature of this crime has led to its underreporting. Part of the problem is streaming services’ unwillingness to provide full transparency when it comes to AI-generated music and the resulting fraud.

This is why we announced at  our annual meeting  that the NMPA will convene a  Songs Summit  this week in Nashville to examine AI-related issues along with streaming fraud and ways that we as an industry can combat it. Digital services, music publishers and songwriters must identify ways we can create standards to address this threat and ensure that fraudsters are not able to divert royalties from hardworking real musicians.

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While there is some  synergy  within the broader music industry on these topics, there are challenges unique to publishing that are not being addressed by current legislation and litigation.

From musical work AI labeling to transparency and usage reporting and AI detection standards, there are areas in which we can agree that are mutually beneficial and will improve the integrity of music globally.

Our industry has never needed to align more than right now. Much like the piracy crisis decades ago, this is a make-or-break issue. We have to stop the fraudulent streaming slush fund for criminals and, in doing so, protect the income streams of songwriters.

David Israelite is the president and CEO of the National Music Publishers’ Association (NMPA). Founded in 1917, NMPA is the trade association representing all American music publishers and their songwriting partners.

_Originally reported by [Billboard](https://www.billboard.com/pro/streaming-fraud-hurts-songwriters-find-solutions/)._