To Fight Streaming Fraud Effectively, Distributors & DSPs Must Work Together. Here’s How (Guest Column)

Last year, I wrote an op-ed titled “Fighting Streaming Fraud at the Distributor Level.” In it, I discussed the complexity of streaming fraud, where it comes from and how it can be solved with all industry stakeholders working together. At Symphonic Distribution, we’ve worked to create resources for our clients, such as an analytics tool that shows fraudulent streams and best practices for streaming safely while utilizing KYC (know your customer) efforts to combat increases in fraud and championing the use of identity verification. All of these efforts, along with continued collaboration between members of the Music Fights Fraud Alliance (MFFA), have led to a reduction in instances of fraud.

In the months since my op-ed was released, streaming fraud has become an even more important topic of conversation at industry events and conferences and is being meaningfully addressed by distributors around the globe. Currently, most distributors have continued to be or are now involved in learning how to proactively deal with fraud; they’ve been more vocal, provided more data to each other, and most now have policies to prevent it as best they can. However, fraud has also become more sophisticated, and like a virus, it has mutated and evolved to better hide itself. For example, we’ve recently seen fraudsters begin to “sprinkle” fraudulent activity through bot playlists, use AI to impersonate artists and even attack legitimate streaming activity to weaponize fraud against others as sabotage; the latter even happened to me.

Symphonic has had success in decreasing fraud and been outspoken about what can be done to combat it. I can say we’ve seen results, and that our work will continue, but we felt it important to be transparent about what could be done to continue to make progress in this area.

Distributors

As I’ve said before, distributors need to implement advanced KYC procedures. At an absolute minimum, there needs to be robust identification checks for all new labels and artists they bring under their umbrella. Fraudsters cannot commit fraud if they can’t upload their tracks, and many will balk when asked to provide their personal ID. Moreover, if they do provide their ID and commit fraud that is then traced to them, all accounts linked to that ID can be deleted at once.

Additionally, leveraging platforms such as Tipalti, Trolley and other fintech payment platforms is helpful for OFAC (Office of Foreign Assets Control) compliance and further helps identify the individual. As distributors, we all have a responsibility to ensure that who we’re dealing with is actually who they say they are and truly the rightsholder. This is a challenge, but the effort is worth it.

Here are a few additional actions distributors can take:

Implement and Enforce Strict Content Verification Processes

Before content is published, implementing rigorous verification procedures can prevent the distribution of infringing material. This includes verifying the authenticity of tracks and ensuring that proper licenses are in place. Sony Music’s recent removal of over 75,000 AI-generated deepfake recordings highlights the importance of proactive content management.

Educate Artists and Labels on Ethical Practices

Providing clear guidelines about artificial streaming and its consequences is crucial. Educating stakeholders on the risks associated with fraudulent services and emphasizing the importance of organic growth can deter participation in unethical practices. Resources like Symphonic’s best practices for streaming safely offer valuable insights.

Collaborate Across the Industry

Forming alliances and working collectively can strengthen the fight against fraud. Initiatives like the MFFA demonstrate the effectiveness of industry-wide collaboration in addressing streaming fraud.

DSPs

Similarly, digital service providers (DSPs) need to be more discerning about what content gets ingested into their platforms. With more than 200,000 tracks being added on many of them each day, DSPs must take a more active role in creating more friction in the process of uploading music to dissuade and discourage fraudsters.

What DSPs can do to help:

Strengthen User-Generated Content (UGC) Systems for Issue Resolution

UGC platforms have developed systems that help identify and resolve disputes among parties without the need for extensive legal action. Strengthening these systems can enhance conflict resolution and reduce litigation.

Meaningfully Address AI in Music

At a minimum, AI-generated songs should be clearly labeled. Action is already being taken here with groups like AI:OK working on developing an AI Trustmark, but DSPs should already be adopting more stringent AI guidance. At Symphonic, we ask our clients whether they have used “Some,” “All,” or “No” AI in their content during the upload process to improve identification. We are also exploring partnerships to enhance AI detection and verification.

The bigger question remains: What is AI-generated music worth? DSPs could provide more guidance in this area, and implementing clearer rules now could drive more rapid and structured change while legal frameworks evolve. We are not anti-AI, but we support the idea that fully AI-generated content should be valued less than AI-assisted human-created content.

Develop and Implement Stronger Regulations for Distributors

As a result of fraud, distribution needs to be taken more seriously than it currently is. There are too many distributors with overly open policies who do not approach the matter responsibly. Instead of adding more distributors, we should consider working with the many reputable companies that already exist. And by extension, DSPs shouldn’t work with new distributors unless they are addressing fraud at the point of ingestion.

Coming Together

With fraudsters finding new and unique ways to commit fraud, distributors, DSPs, and other entities in the industry have come together to fight them. Chiefly, the MFFA, formed in 2023, continues to expand and add new members and anti-fraud initiatives. Since its inception, the MFFA has grown to more than 20 members. In addition to Symphonic, it includes Tunecore, CD Baby, Empire, Spotify, SoundCloud, Meta and many more. Those who are a part of the MFFA are beginning to continuously share information with each other so that we all know what to look for and stay informed as an industry on how best to fight fraud. This data sharing practice has already helped Symphonic reduce fraud, and from what we’ve heard, it is also doing the same for our partners in the MFFA.

I’ve continued to have these conversations at conferences and other industry events, and the enthusiasm for coming together to fight fraud is apparent. With the appointment of Michael Lewan as executive director, the work of the MFFA is going to accelerate quickly, and more companies will soon be able to join to expand the work they’re doing.

At the end of the day, there will always be more we as an industry can do to combat fraud because, like all things, it will continue to evolve. We need to make it harder for bad actors and fairer for real artists. As we’ve done already, distributors need to enhance their KYC efforts — if you don’t know who your clients are or have a way of identifying them individually, don’t work with them. On the other side, DSPs need to be more cognizant of what’s being ingested on their platforms and build some walls to slow down the process and enable fraud identification. We’ll continue to have these conversations and fight for a fair, safe, and trusted environment for artists, songwriters, and consumers to listen and submit music to.

Jorge Brea is the Founder and CEO of Symphonic Distribution, a 100% independent company offering full-service distribution, marketing, royalty collection, and more for record labels, artists, managers, and distributors alike with footprints in Tampa, Brooklyn, Nashville, Bogotá, Mexico, South Africa, Canada, and Brazil. Jorge is an active member of the Music FIghts Fraud Alliance, was named to Billboard‘s 2024 International Power Players list, won the Music Biz 2024 #NEXTGEN_NOW One to Watch Bizzy Award, and in 2023 was on the Tampa Bay Business Journal’s 40 Under 40 list.