[Tim Ingham tells a story of a Spotify royalty scam run by a “Bulgarian playlister” (…stop right there and go no further…who was running what are obviously scam playlists of snippets by manipulating Spotify subscription accounts. As Tim notes, the fact that the “Bulgarian playlister” was able to manipulate a large number of “paying” subscription accounts, raises yet more important questions about Spotify’s subscriber numbers. This is obviously of vital importance to potential buyers of Spotify’s stock–what subscriber numbers are real. Perhaps the Securities and Exchange Commission will question the man behind the curtain.]
A Bulgarian playlist-maker scammed the Spotify payout system for months last year – and could well have made themselves a millionaire off Daniel Ek’s platform.
That’s the shock claim being made by multiple high-level industry sources to MBW this week.
Music Business Worldwide can today reveal details of the alleged shakedown, which reached its height at the end of last summer.
The evidence we’ve gathered strongly suggests that one party sucked a vast amount of money – as much as $1 million-plus – out of the Spotify royalty pool, and away from legitimate artists and labels.
And the best/worst part of all? They probably didn’t break any laws in the process….
Spotify tells us it’s now “improving methods of detection and removal”. But the big question remains: are the scammers out there improving their methods too?
Are there others, like our Bulgarian friend, purchasing multiple premium Spotify accounts and rinsing playlists stuffed with cheap music to which they own the rights?
If so, how many of these Spotify scammers exist – and how much money are they generating?
Are they operating at a lower commercial level than The Bulgarian and, therefore, not outing themselves by appearing on weekly top global playlist charts?
Crucially: what does all of this mean for the solidity of valuations for music’s biggest companies?
And even more crucially… what does it mean for the veracity of Spotify’s paying audience as the company begins its high-stakes escalation towards the New York Stock Exchange?
Read the post on Music Business Worldwide