Spotify has everything ready to launch its IPO and become a public company. However, there is a small story running parallel to this big event, involving a Bulgarian scammer. The individual organized an operation in mid-2017 with two playlists full of fake artists, and what appears to be a bot controlling more than a thousand Premium accounts. The result? Approximately one million dollars in royalties.
The scheme might sound like a spin-off of the Ocean saga, but it not only happened in real life, but the 'victim' was none other than Spotify. According to the original article from Music Business Worldwide, everything began in the middle of last year when two playlists climbed the charts at an astonishing speed: Soulful Music and Music From The Heart. Both playlists appeared on the confidential global ranking that Spotify distributes to record labels. By the end of September, Music From The Heart had reached position 84 on the confidential list and 22nd on the US chart. Soulful Music performed even better: 35th and 11th.
Suspicious Details
However, several details suggested something was off with these playlists. For one, Soulful Music had 467 songs—a suspiciously high number. The artists behind these tracks were unknown, and their ISRC codes pointed to Bulgarian territory. Moreover, the follower count did not exceed 2,000 users, yet the playlist was supposedly in the global Top 50. Finally, most of these songs barely exceeded 30 seconds in duration, the minimum required by Spotify to monetize content. Another critical detail: an average of 1,200 Premium users were listening to every song of Soulful Music each month, and something similar was happening with Music From The Heart.
The Mechanics of the Scam
Spotify neither confirmed nor denied the fraud, but the strongest hypothesis suggests that an entity based in Bulgaria invested just over $12,000 monthly to create 1,200 Premium accounts with the sole purpose of streaming both playlists 24/7—playlists he himself had uploaded. The rest is pure math. Those 1,200 accounts can generate nearly 72 million plays per month, and multiplying that by the average $0.004 Spotify pays per stream gives $288,000 monthly. Considering that this revenue comes from a single playlist, and accounting for expenses and other losses, the Bulgarian walked away with more than a million dollars in just four months of activity.
Spotify's Response
Spotify's official response is canned: "We take artificial manipulation of our service very seriously" and "We will continue refining our detection methods." But the question remains: what prevents scammers from doubling down?
