He had the idea and the nerve. He scammed the music platforms for 10 million

Artists’ earnings on Spotify are poor

Musicians have long criticized streaming platforms for their poor revenue-sharing programs. In 2021 alone, 97% of Spotify’s 6 million artists made less than $1,000. Last year, the company announced a program offering fractions of a cent per song, throwing in a whole bunch of strict rules. Apparently, there was a way to get bigger money from Spotify. All you had to do was have an army of bots, hundreds of thousands of AI-generated tracks, and be willing to risk being prosecuted for fraud.

Michael Smith of North Carolina was indicted on September 4, 2024. US prosecutors have charged him with defrauding streaming platforms including Spotify, Apple Music, Amazon Music and YouTube Music of $10 million. The accused paid himself royalties between 2017 and 2024. To earn such a huge sum of money, he had to buy hundreds of AI-created songs from a third party, upload them to music services. Then, he ordered bots, more than 10,000 of them, to play each song around the clock.

Streaming platforms explicitly prohibit fraud involving artificially increasing the number of views and the use of bots and programs. The bot army had to play the AI’s song collection billions of times, for almost 8 years, to amass that payout.

Smith claims that he allegedly used $1.3 million to run the machine. He emailed himself financial statements of his operations, which he used to calculate the total.

The conspiracy, however, was not so good that it was ultimately not detected. Streaming platforms have been sporadically contacting Smith since 2018 regarding songs they considered artificial creations.

In Smith’s case, he faces a maximum of 20 years in prison for the wire fraud conspiracy and money laundering charges.

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