Spotify Gets Legally Scammed From Bulgaria

Spotify Soulful Music Playlist from Music 3.0 blogIt’s not everyday that you hear of a big tech company getting scammed, but when it’s done legally it’s especially unusual. A report in a recent Music Business News described how someone from Bulgaria used a pair of playlists to take as much as a million bucks in royalties from music tech giant Spotify. Here’s how they did it.

The person set up a couple of playlists, one called Soulful Music and the other Music From The Heart. Soulful Music was the one that became the most successful, rising as high as #35 on the global chart and #11 in the U.S. How? The playlist featured 467 songs by unknown artists with very little in the way of profile information, suggesting that they were fake. Most playlists have far fewer songs than this. What’s more, each of the songs averaged around 47 seconds long (as you can see on the right), or just over the 30 second limit that Spotify uses to to count it as a play.

The next thing that was unusual is that the playlist only had 1,797 followers, which is an extremely small number for a successful playlist that reaches into the top 100. Spotify’s analytics says that there were only about 1,200 actual monthly listeners to each song, again a very low number.

Here’s what they think happened.

The person in Bulgaria registered 1,200 fake Spotify accounts. This is expensive at $9.99 apiece (although it could have been cheaper with student and family plans) and comes out to around $12,000 per month, but a drop in the bucket when you consider the revenue that it generated.

Bots were then created to randomly play tracks until just beyond the critical 30 second point, then skip to another track. This meant the 1,200 accounts playing continuously for 30 days would generate 103 million plays in the month!

On the low end, Spotify pays out $0.004 per play, and if you use the lowest figure, that means that the playlist generated  around $415,000! And this was just from one playlist.

A label exec supposedly noticed the scam and notified Spotify, who then deleted the songs and fake accounts, although the playlists still remain. As you’d expect, the playlists are no longer in the top 100 however. Still, it took 4 months for the scam to become evident so much more than a $1 million was paid out by that time.

So how did the playlists get into the top 100 to begin with? Spotify looks at the amount of revenue generated by each playlist when creating the charts, and Soulful was a top generator at that point. The only way it came to anyone’s attention is that it was too successful for its own good.

Rest assured that Spotify is now on the lookout for similar tactics, so this may be a one and done situation. Pretty clever though.

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