A Danish music industry executive has been sentenced to eighteen months in prison for what appears to be the first reported case of “industry insider” streaming fraud. This case also marks the first criminal prosecution of music streaming fraud resulting in imprisonment. While previous successful prosecutions have been related to video streaming fraud, particularly with pay TV sports, this case is unique in that it involves reselling legitimate music by altering it slightly and releasing it under different names. The fraud, committed over a six-year period, generated millions of Danish kroner in royalties.
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The individual, known as “NN” for now, is an industry insider with a long career in the music business. The fraud was uncovered when members of different bands discovered their music had been altered and streamed under different names. The Danish Rights Alliance became involved in 2017 after noticing unusual streaming activity and conducted an investigation, leading to the discovery of multiple subscriber accounts created by NN to stream various songs.
Data provided by Spotify shows that a single user played a playlist nearly 600 times per day over three days, resulting in 5.5 million streams in one week from 20 accounts. NN admitted in court that the streams came from accounts he created. The court ordered the confiscation of fraudulently obtained royalties totaling around £500k.
Industry professionals have praised the ruling as a historic verdict that highlights the seriousness of stream manipulation challenges. The case sheds light on the wider issue of stream manipulation, including creator-orchestrated manipulation and industrial-scale manipulation using bot farms. These bot farms, operated by perpetrators or third parties offering “stream manipulation as a service,” aim to increase streaming activity on specific tracks for financial gain.
Recent trends in stream manipulation include “account hijack” and “man in the middle” fraud, where hackers obtain legitimate streaming users’ account credentials to direct streams towards specific tracks. Additionally, there are cases of “insider fraud” where individuals within labels or value chain participants engage in stream manipulation for personal gain.
As the industry continues to combat stream manipulation, perpetrators are becoming more sophisticated in their methods, making it challenging for authorities to prevent fraudulent activities. The case emphasizes the need for stricter measures to curb stream manipulation and protect the integrity of the music industry.