As founding partners of the music industry's first event focussing solely on Trust & Safety, Downtown and the Music Business Association have brought the sector together to open up candid conversations about how fraud can be combatted and how businesses can work together to minimize its impact. The event takes place on Tuesday, January 9, 2024 at New York University’s Rosenthal Pavilion.
In the interview below, hear from Portia Sabin, CEO of The Music Business Association and Molly Neuman, CMO of Downtown about how the event came about and what they hope it will achieve.
1. The Music Business Association and Downtown’s Trust & Safety In Music Symposium will be the first music industry event dedicated to the topic of streaming fraud. Why is it so crucial to have these discussions right now?
Molly Neuman: When we originally conceived of the symposium, the motivation was to connect our peer companies and colleagues around a topic that truly impacts all of us and to identify areas of commonality & build on them. Music Biz already has its fraud task force committee, and Downtown's companies have been involved in the Music Fights Fraud Alliance initiative from its earliest stages of formation. Having a focused session to tackle these topics as a community is a meaningful way to kick off 2024.
Portia Sabin: Our mission has always been to bring representatives from various industry segments together for productive discussions about important topics. When Molly reached out about the idea, it was a no-brainer that Music Biz would be a part of it.
It’s also important for the Music Business Association and Downtown to work together to put on this event because for many years different sectors in our industry felt that fraud was someone else’s problem. However, when Billboard is reporting that more than $1 billion in royalties could be lost to streaming fraud worldwide, I think people are beginning to understand that this is a problem for the industry as a whole and that we need to work together to address it.
MN: I have been so impressed with the growth of the Music Business Association and the substance of its initiatives in recent years. As a former board member and longtime member via a variety of companies, I know the Association truly is the right partner for the industry to help us center our tough conversations and put actionable steps into motion.
PS: Molly mentioned our Spin Fraud Task Force as well as the Music Fights Fraud Alliance a bit earlier. These groups are having great conversations, but there are other industry segments that should also be involved including publishers, managers, and artists. That’s why this event is open to everyone — the more voices we have, the faster we can educate the entire industry about this issue and work together to develop solutions.
2. Can you discuss how streaming fraud affects the different segments of the music business? And which companies or individuals are most seriously affected?
MN: It impacts every layer of our industry, from creators to their partners in managing rights, to the services and music fans. Manipulation of streams truly impacts us all.
PS: Streaming fraud affects everyone who touches a song along its journey from creation to distribution by diluting the overall royalty pool, reducing revenue for legitimate streams, and slowing the approval & release process for artists. It has a disproportionately great impact on self-releasing artists, who represent the fastest-growing sector of the global music industry.
3. Apple reports that it has been penalizing fraudsters since 2022, and Spotify says the company has started to roll out its own fraud protection tools. To date, what other measures have been taken to combat fraud in our industry?
MN: The current policy changes underway at Spotify on monetization eligibility are a significant step to ensure that all stakeholders are motivated to prevent fraudulent activity at every stage of the process. This is a significant change and one that we’re all looking at closely to ensure that it ultimately benefits creators and their partners in rights management. Every company will be making adjustments and some will be challenging to implement, but ultimately, it is a progressive step towards a recalibration of current dynamics that is likely necessary.
4. There has been a lot of talk about swapping from pro rata payment models to user-centric payment models to combat fraud, or implementing tiered royalty calculations that disincentivize activity from bad actors. Would such changes to streaming payout models solve all the industry’s fraud issues?
PS: I think the problem with this idea is that it conflates the payment model with all acts of fraud, but there are so many ways that fraudsters are gaming the system that it doesn’t cover everything. The “many flavors of fraud” is one of the major things we’re discussing at this Symposium, and understanding all the ways that fraud is happening, has happened, and potentially will happen in the future is really important. Fraudsters are smart and change their methods all the time, so one challenge for our industry is to stay on top of the ways money is being siphoned off, and that is not just dependent upon the payment model of a given service.
5. How does fraudulent activity around music streaming compare or contrast to that in other entertainment markets (movies, video games, fine art, etc.)?
PS: Because fraud is a universal phenomenon, it’s really instructive to see how other industries have handled it. The exact type of fraud may not look the same, but the conversations that need to be had in the industry are often the same. And we see in other industries that competitors have had to work together to combat fraud and ended up better for it, which is a great example for us to follow.
6. To that point, are there things we can learn from other industries to better address fraud in the music business ecosystem?
PS: Absolutely. One thing to think about is that many other industries are now regulated, but were once unregulated. We are currently unregulated so there are things we can learn from watching what other industries did before they were regulated to figure out some best practices.
7. What do you hope attendees to the first-ever Trust & Safety Symposium take away from the event?
MN: I hope we will be motivated to collaborate on solutions that help prevent fraudulent activity in the first place and help us resolve conflict with more expediency and thoroughness. Recorded music and publishers, as well as rightsholders and digital services, need to work together to make progress and implement long-term, substantial change.
PS: I think Molly said it perfectly — motivate to collaborate!
Buy your ticket for the industry's first Trust & Safety Symposium taking place on Tuesday, January 9, 2024 at New York University’s Rosenthal Pavilion here.
