An alleged scammer has been arrested under suspicion that he used AI to create a wild number of fake bands — and fake music to go with them — and faking untold streams with more bots to earn millions in ill-gotten revenue.
In a press release, the Department of Justice announced that investigators have arrested 52-year-old North Carolina man Michael Smith, who has been charged with a purportedly seven-year scheme that involved using his real-life music skills to make more than $10 million in royalties.
Indicted on three counts involving money laundering and wire fraud, the Charlotte-area man faces a maximum of 20 years per charge.
TBF, this particular loophole doesn’t take any money from the streaming services. Quite the opposite, it massively inflates their stats.
And while it does siphon money from the big labels, it also impacts small indie artists just trying to earn enough from each play to get to eat.
Yeah, this guy is in trouble because he stepped on some big toes, but he curb-stomped a bunch of little guys, too.
So corporations use ai and bots themselves in order to inflate their stats and steal money from investors and share holders(see Reddit) and its all cool. Someone does that but it costs the corporation some money. Straight to jail.
Seriously, how has the reddit IPO which was offered to users not been a fraudulent scheme due to the website statistics being based on genuine user interaction with no mention of auto reposting or bots that are either operated by or hired by reddit?
It genuinely seems like the next ponzi scheme but that would require so many federal agencies that stopped giving shit and learning how the world works to see any peep into that business.
But what do I know, I’m just some average Joe that gets audited over a $300 mistake on annual taxs which I have to pay a private third party more than that to do.
Using AI to provide services or crawlers to scan the internet for pages to add to search evinces is different from what this guy did with bots. Those use cases are not pretending to be a legit user in order to collect money.
What this guy did — using bots to fake listen to music — is in the same category as using bots to click on ads that you put on your own web page: it’s serving no legitimate purpose and only exists to defraud businesses which paid for the ads (or Spotify which is paying the royalties)…
How?
I read the article but I don’t understand how bots making and listening to songs to generate royalties for the bot owners affects anyone but the royalty-payers?
The “royalty payers” are the streaming subsribers, and they pay the same amount regardless of how much they listen to.
The different streaming services have different payment models, but Spotify at least works by first taking their cut from subscribtion income each month.
Then, the rest is evenly distributed to the plays that month.
By inflating the playcount with bots, this guy gets a bigger share, at the expense of everyone elses plays becoming worth less.
None of the services have some infinite money glitch where more plays just means more money out of nowhere. How much you get for each play is not a fixed amount, It’s always based on how much money actually came in from subscribers, so anyone using bots to tilt the scales, is stealing from everyone else.
Agreed. As a person that has released music, I hate this guy and would like the book thrown at him and anyone mass releasing shitty AI music… It might not be a big corpo doing it, but it’s still fucking creatives over.
I’m sorry but it’s the 21st century, even small indie artists can have their own sites nowadays or, heck, use bandcamp, sellaband… you can’t really use technological complexity as an excuse to depend on fat middlemen.
It’s not “complexity”.
It’s that end users have no interest in paying for individual songs.