"The Bands and the Fans Were Fake. The $10 Million Was Real"

[cedar]

Fascinating story from the NYT

 

Full article from the NYT

 

Here are some snippets:

 

Quote

A North Carolina man used artificial intelligence to create hundreds of thousands of fake songs by fake bands, then put them on streaming services where they were enjoyed by an audience of fake listeners, prosecutors said.

Penny by penny, he collected a very real $10 million, they said when they charged him with fraud.

The man, Michael Smith, 52, was accused in a federal indictment unsealed on Wednesday of stealing royalty payments from digital streaming platforms for seven years. Mr. Smith, a flesh-and-blood musician, produced A.I.-generated music and played it billions of times using bots he had programmed, according to the indictment.

The supposed artists had names like “Callous Post,” “Calorie Screams” and “Calvinistic Dust” and produced tunes like “Zygotic Washstands,” “Zymotechnical” and “Zygophyllum” that were top performers on Amazon Music, Apple Music and Spotify, according to the charges.

 

And:

Quote

His scheme involved a circular process, they said. First, Mr. Smith created thousands of fake streaming accounts using email addresses he had purchased online. He had as many as 10,000, even outsourcing the task to paid co-conspirators when creating the accounts became too much work.

Quote

He then created software to stream his music on loops from different computers, giving the appearance of individual listeners tuning in from different places, prosecutors said.

According to a financial breakdown that he emailed himself in 2017 — the year that prosecutors say he began the scheme — Mr. Smith calculated that he could stream his songs 661,440 times each day. At that rate, he estimated, he could bring in daily royalty payments of $3,307.20 and as much as $1.2 million in a year.

To evade detection by streaming platforms, prosecutors said, Mr. Smith spread his activity across a huge number of fake songs, never streaming a single composition too many times.

I won't attempt to quote entire article, but I recommend it to anyone interested in AI, streaming services, and well music generally.

[Polychrest]

So this guy gets arrested for automating and up-scaling the production and on-line playing of the same digital products everyone from bedroom producers to major record companies posts on streaming services.  Was he auditioning for a job with Putin?  Are we now going to have to worry about how many times we can click on our own songs before the FBI comes knocking?  Are record companies going to ignore the fact that this guy made $10 million from posting rubbish with zero overhead paid to actual musicians?  We live in interesting times.

[ElmerJFudd]

I saw this today as well.  Quite a scheme to cheat a digital system with digital systems.  

[ElmerJFudd]

No pay wall. 
 

https://www.billboard.com/pro/ai-music-streaming-fraud-case-feds-accuse-man-10m-song-scam/

 

“Smith began working with the Chief Executive Officer of an unnamed AI music company and a music promoter to create thousands of thousands of songs that Smith could then fraudulently stream.” Within months, the CEO of the AI company was allegedly providing Smith with “thousands of songs each week.” Eventually, Smith entered a “Master Services Agreement” with the AI company that supplied Smith with 1,000-10,000 songs per month, agreeing that Smith would have “full ownership of the intellectual property rights in the songs.” In turn, Smith would provide the AI company with metadata and the “greater of $2,000 or 15% of the streaming revenue” he generated from the AI songs.

“Keep in mind what we’re doing musically here… this is not ‘music,’ it’s ‘instant music’ ;)”, reads an email from the AI company’s CEO to Smith that was included in the indictment.“

[Docbop]

Maybe he was inspired by the group sorry I forget their name got ticked at Spotify of payment.    The group told fans to make hours long playlists of there songs and to play them at night with the sound off while they slept.   Fans did it and the group was suddenly getting big checks from Spotify until Spotify found out.  Nothing illegal real band, real fans making playlists of their favorite band and playing it over and over and over. 

[JamPro]

1 hour ago, ElmerJFudd said:

No pay wall. 
 

https://www.billboard.com/pro/ai-music-streaming-fraud-case-feds-accuse-man-10m-song-scam/

 

 

Thank you.  I was interested in reading more, but I can not access NY Times content.

[JamPro]

This is intense.  First, he is facing federal charges of wire fraud - which probably carries years of prison time.  Second, his plan involved creating as many as ten thousand "bot" accounts at different streaming services (Pandora; Spotify; etc.).  And he paid the streaming fees for all those accounts.  Third, he and his team made thousands of AI songs (1k -10k per month!), and uploaded all of them to streaming services.  Of course, none of that is illegal. 

 

From the indictment: “The defendant’s alleged scheme played upon the integrity of the music industry by a concerted attempt to circumvent the streaming platforms’ policies."   The Integrity of the music industry.......is something that could only be said with a straight face by someone who has zero experience working in the music industry.  Apparently, it is illegal to try and get around the policies (not laws - "policies") of the streaming services.

 

Stream your own content once may be a crime, albeit one that is too small potatoes to prosecute.  Stream your own content thousands of times is illegal.

[Dockeys]

I’m laughing as well at that indictment talking about the integrity of the music industry. While Spotify ceo claims that the cost of creating content is “close to zero”. These two are the furthest thing from musical integrity I can imagine. 

[JoJoB3]

Wow, fascinating. I'm not sure this guy won't be able to litigate himself out of this. The current jig may be up but I suspect in the end he keeps the take.

[ElmerJFudd]

I’m actually thrilled to hear that an AI music generator is part of the scam and that the amount of money is large enough to get the attention of wealthy people and thus the FBI.  
 

AI music, “instant music”,  directly steals from copyrighted works and does it with fantastic speed and volume.  The fact a CEO of an AI music company was involved in this streaming scam speaks volumes about the intentions of these companies.  How they plan to make money by stealing both recorded music AND job opportunities from creative human artists.  

[cphollis]

As I'm reading the article, it says that this has been a problem with the streaming model for quite a while, it's just that no one has scaled things this big before.  So they're gonna make an example out of him, for sure.

 

The streamers are too lazy to sniff out inauthentic users, so instead they'll go bust some people and try to scare others off.  Although this guy took a well-known flaw to incredible levels -- that part deserve major props.

[AROIOS]

3 hours ago, Docbop said:

Maybe he was inspired by the group sorry I forget their name got ticked at Spotify of payment.

Vulfpeck

[Polychrest]

2 hours ago, cphollis said:

. . . this guy took a well-known flaw to incredible levels -- that part deserve major props . . .

His scheme has all the ethical and practical cachet of bitcoin mining—applied to today’s less-than-ethical music business.

[ProfD]

This guy made $10 million and I've never heard of the bands or songs.😁

 

In addition to indictment, I wonder if he'll get sued for copyright infringement as well.😎

[ElmerJFudd]

24 minutes ago, ProfD said:

This guy made $10 million and I've never heard of the bands or songs.😁

 

In addition to indictment, I wonder if he'll get sued for copyright infringement as well.😎

Sounds like it’s time once again for the music industry to look at their business model and reassess.  While they’re at it they can also look at what’s fair for human artists and human subscribers. 

[David Emm]

I was going to suggest what I'd consider to be a just penalty for that guy, but its too gross for a family board. Let's just say that American Indian warriors preferred to die in battle rather than be captured and given to the opposing tribe's women. I'm curious about the eventual Venn point between what AI can do for you and what it can do TO you. Capitalism has no fail-safe brakes like elevators do. Its a shame that the means to create music with no limitations also came with the means to jerk the rug out from under us all to the tune of $10 mil. Note that this was just ONE guy. IMO, we need to let a few battalions of those Amerind women loose on everyone who goes for that low-hanging digital fruit.

 

Am I going to give up composing & playing over it? Aw, hell no, I'm pissed, not crazy!

[Thethirdapple]

Beat them at their own game and we come to realize that : 

 

Crooks hate to get ripped off!

 

Pirates dont like others to steal…

 

thats all folks, now back to your regularly scheduled struggle to make ends meet.

 

 

PEACE

_
_
_

[J.F.N.]

Where in this are their any actual laws broken? The fact he signed up with "false" accounts for the services, is that per se juridically illegal?

[J.F.N.]

17 hours ago, JamPro said:

This is intense.  First, he is facing federal charges of wire fraud - which probably carries years of prison time.  Second, his plan involved creating as many as ten thousand "bot" accounts at different streaming services (Pandora; Spotify; etc.).  And he paid the streaming fees for all those accounts.  Third, he and his team made thousands of AI songs (1k -10k per month!), and uploaded all of them to streaming services.  Of course, none of that is illegal. 

 

From the indictment: “The defendant’s alleged scheme played upon the integrity of the music industry by a concerted attempt to circumvent the streaming platforms’ policies."   The Integrity of the music industry.......is something that could only be said with a straight face by someone who has zero experience working in the music industry.  Apparently, it is illegal to try and get around the policies (not laws - "policies") of the streaming services.

 

Stream your own content once may be a crime, albeit one that is too small potatoes to prosecute.  Stream your own content thousands of times is illegal.

 

So with those $10 million earned, getting a great lawyer and he will walk home free with the money in the end...

[J.F.N.]

16 hours ago, cphollis said:

As I'm reading the article, it says that this has been a problem with the streaming model for quite a while, it's just that no one has scaled things this big before.  So they're gonna make an example out of him, for sure.

 

The streamers are too lazy to sniff out inauthentic users, so instead they'll go bust some people and try to scare others off.  Although this guy took a well-known flaw to incredible levels -- that part deserve major props.

 

I just have a hard time seeing how this would be breaking any law, except potentially the fake account part of it as I assume that could probably fall under falsification of some sort, but for the rest, the streaming platforms need to get their ducks in a proper row, this being possible is no ones fault but their own!

[Thethirdapple]

52 minutes ago, J.F.N. said:

fake account part

Seems to me its not even a fake account: its an LLC… (in USA, its a limited liability company)

 

a shell company like all the other shell companies setup to make accountability impossible. Or how about companies “spinning” off entire division as “separate entities” AFTER THE FACT to avoid liabilty. And the “courts” are all about it. Talcum powder anyone?

 

We simply set ourselves up as individual corporations and stop being “citizens” and we gain all the RIGHTS and PRIVILEGES which the corporate charters have established as the new world order. 
 

just a thought

 

 

PEACE

_
_
_

 

 

[J.F.N.]

11 minutes ago, Thethirdapple said:

Seems to me its not even a fake account: its an LLC… (in USA, its a limited liability company)

 

a shell company like all the other shell companies setup to make accountability impossible. Or how about companies “spinning” off entire division as “separate entities” AFTER THE FACT to avoid liabilty. And the “courts” are all about it. Talcum powder anyone?

 

We simply set ourselves up as individual corporations and stop being “citizens” and we gain all the RIGHTS and PRIVILEGES which the corporate charters have established as the new world order. 
 

just a thought

 

 

PEACE

_
_
_

 

 

 

I was thinking about the thousands of listener accounts..

[ElmerJFudd]

1 hour ago, J.F.N. said:

 

I just have a hard time seeing how this would be breaking any law, except potentially the fake account part of it as I assume that could probably fall under falsification of some sort, but for the rest, the streaming platforms need to get their ducks in a proper row, this being possible is no ones fault but their own!

I’m sure if they worded it properly that the terms of service at the streaming companies were broken.  And possibly claiming ownership of AI generated songs - can someone own an AI generated song?  
 

There is definitely fraud and a scheme to funnel money away from the streaming services.   And it does harm customers, shareholders.  If we didn’t have bots and fake accounts subscriptions could be cheaper and real artists paid better.  Shareholders would see a greater profit.  
 

It’s similar to Credit Card fraud - it harms customers - we all pay exorbitant interest rates to compensate for identify theft,  customers who don’t make their payments, etc.   So they are approaching this as a financial crime.  

[Thethirdapple]

54 minutes ago, J.F.N. said:

 

I was thinking about the thousands of listener accounts..

Exactly, not fake at all they are “subsidies” of an “main” account. A shell company is more like an onion with layers of convoluted anonymous  “ownership”…

 

Corporations are legally allowed to do this. Users and citizens are held in comtempt….

 

lame

 

 

 

 

PEACE

_
_
_

 

[J.F.N.]

19 minutes ago, ElmerJFudd said:

I’m sure if they worded it properly that the terms of service at the streaming companies were broken.  And possibly claiming ownership of AI generated songs - can someone own an AI generated song?  
 

There is definitely fraud and a scheme to funnel money away from the streaming services.   And it does harm customers, shareholders.  If we didn’t have bots and fake accounts subscriptions could be cheaper and real artists paid better.  Shareholders would see a greater profit.  
 

It’s similar to Credit Card fraud - it harms customers - we all pay exorbitant interest rates to compensate for identify theft,  customers who don’t make their payments, etc.   So they are approaching this as a financial crime.  

 

But is breaking terms of service a crime?

 

And for AI material, obviously he did sorted the rights with the owner of the AI platform...

 

8 minutes ago, Thethirdapple said:

Exactly, not fake at all they are “subsidies” of an “main” account. A shell company is more like an onion with layers of convoluted anonymous  “ownership”…

 

Corporations are legally allowed to do this. Users and citizens are held in comtempt….

 

lame

 

 

 

 

PEACE

_
_
_

 

 

Lovely, can't wait to see more about this courts process! 🤣

[cphollis]

"If we didn’t have bots and fake accounts subscriptions could be cheaper and real artists paid better. "

 

Yes, that's the crux of it for me.  Writing a bit of code to detect spurious patterns ain't that hard.  Just look at what credit card companies do for example -- it's not rocket science.  But they're cheap, greedy and lazy.

 

The same problem exists on all the major tech platforms (e.g. X) where paying advertisers can't be sure how many real people they're reaching.  Many have efforts to weed out abusive fakes, but not the music streamers obviously. 

 

I think the exception is Apple, which does things quite differently.

 

 

 

 

[ElmerJFudd]

31 minutes ago, J.F.N. said:

 

But is breaking terms of service a crime?

 

And for AI material, obviously he did sorted the rights with the owner of the AI platform...

 

 

Lovely, can't wait to see more about this courts process! 🤣

Interesting - it’s debatable if the AI company that generated the songs owns the songs.  They aren’t new, they are made from copyrighted works.  That’s a different impending court case.  
 

He built a mechanism to siphon money from several businesses by pretending to be many people that don’t exist - both creators and consumers. They’ll approach it the same as banks do when people use false accounts, false identities, or manipulate account records.   It’s fraud.  
 
 

I definitely agree that all the streaming platforms need to do more to protect against fraud.  It hurts the business and all stakeholders.  
 

 

 

[cphollis]

"They aren’t new, they are made from copyrighted works."

 

This particular issue is going to be fascinating to watch evolve in the courts. 

 

Humans routinely listen to thousands of copyrighted musical works, and then generate new ones where derivation is the norm.  That's how popular music works.

 

However, if someone can train software to do the same thing using presumably legal sources, that's "stealing"? 

 

 

 

[J.F.N.]

17 minutes ago, ElmerJFudd said:

Interesting - it’s debatable if the AI company that generated the songs owns the songs.  They aren’t new, they are made from copyrighted works.  That’s a different impending court case.  
 

He built a mechanism to siphon money from several businesses by pretending to be many people that don’t exist - both creators and consumers. They’ll approach it the same as banks do when people use false accounts, false identities, or manipulate account records.   It’s fraud.  
 
 

I definitely agree that all the streaming platforms need to do more to protect against fraud.  It hurts the business and all stakeholders.  
 

 

 

 

Everything I write is the same, my musical capacity is trained on copyrighted material too, I would say it's the same for probably 99% of us...

 

When I was 16 I wrote "Evil Woman", a strikingly similar variant of the piano riff, and part of the melody, luckily the guitar player in my band knew the song and recognized it. I had no idea who ELO was, but my 8 year older brother apparently had some of their albums, go figure.... I had never (consciously) heard it before!

 

Who was frauded? Is it criminal to have lots of streaming accounts? Or is it criminal to listen to the same playlists over again (ooops, I'm in danger then!!).

[Thethirdapple]

When the cheaters (corporations) are complaining about being defrauded with the tools they created to render our lives mediocre…. george sums it all up really nicely

 

 

 

PEACE

_
_
_