But for Michael Smith, a 54-year-old North Carolina resident, the “fans” didn’t exist. They were lines of code, and the music was “AI slop.” It is a feat most Grammy winners never achieve: billions of streams across the world’s largest platforms.
In 2018, Hay and Smith released an album called ‘Jazz’ which shot up the Billboard chart and hit No. 1. right away. Previously, Deezer, a French music streaming service reported that it has seen 60,000 AI songs uploaded to its platform daily, further noting that about 85% of streams on those tracks were fraudulent.
However, due to streaming frauds, these funds are diverted from talented artists to fraudsters.
The “spigot” finally turned off in 2023 when the Mechanical Licensing Collective, a non-profit entity that collects and dispenses royalties for streaming services, had confronted Smith about his fraud and was now halting payments. “Conservatively, it’s a billion-dollar-a-year type of problem,” Hayduk said. “The Michael Smith case is the tip of the iceberg.”
But the next week, it disappeared from the ranking. Hay began receiving notices from distributors flagging their music for streaming fraud and pulling it down. This was just the beginning of the revelation of the gamble. Sadly by the next year, all the fanfare fell silent. The movie slammed, and Smith dipped off social media. Users stream music through platforms such as Amazon Music, Apple Music, Spotify, YouTube Music and more. Each time a song is played through these platforms, the songwriter, singer and other people with rights are entitled to small royalty payments. Streaming fraud has developed into a rampant issue in the music industry over the past couple of years with the rise in use and technology of AI. Fraudsters have made use of codes and websites to generate thousands of songs and flood popular streaming services including Spotify and Apple Music. Morgan Hayduk, co-CEO of Beatdapp, a streaming-fraud detection startup shared with WIRED that he had monitored whole networks of actors siphoning money from streamers.
As part of his plea, Smith has agreed to forfeit $8.1 million in illicit gains, as per the U.S. Smith has officially pleaded guilty to conspiracy to commit wire fraud, marking the first-ever criminal conviction for AI-assisted music streaming fraud in US history. Attorney’s Office for the Southern District of New York.
