Why Is There So Much Fraud in Music Distribution – And How Do We Solve It? (Guest List)

The rise of DIY music distribution platforms like TuneCore and DistroKid has made a significant difference to artists – giving them the ability to reach audiences without the constraints of traditional labels.

However, while democracy has opened the doors for many artists, it has also opened the floodgates for a dangerous, unintended by-product – rampant fraud and copyright infringement. For context, Luminate reports that in 2023, more than 120,000 new songs were uploaded daily, a sharp increase from 93,000 per day in 2022. The rise is largely due to two: the proliferation and growth of the DIY distribution sector and the proliferation of consumers. -focused on music production tools. This relatively new area of ​​the country has greatly increased not only the amount of content but also the industry’s exposure to illegal and illegal content.

Universal Music Group’s recent $500 million lawsuit against TuneCore and its parent company Believe underscores the seriousness — as well as the bottom line. The case asserts that these platforms make illegal profits from gross copyright infringement, where the liability for publishing and monetizing IP is not authorized by the provider and the wrongful user alike. Finally, this case highlights a widespread failure, the system, aggravated by not having enough care, responsibility and protection for control. But the ecosystem has become too large, too unregulated and too costly for some of its stakeholders to manage on their own. The change is overdue.

Democratic distribution

DIY distribution was originally designed to level the playing field, allowing any artist to release music on platforms such as Spotify, Apple Music and YouTube. However, open access has had consequences – in particular, the misuse of IP. This sector has become a breeding ground; malicious users take advantage of the low barrier to entry by uploading pirated, remixed, or slightly modified copyrighted songs. Generally, these ads generate a lot of money, and a portion of it goes to the merchants who receive them.

This is not an isolated issue. With millions of songs uploaded every year, there is a huge challenge to verify each song. Although some platforms claim to have anti-fraud systems, police action is often limited. The sheer volume of uploads makes it difficult to monitor on a scale, creating a laissez-faire approach that allows indirect crime to flourish.

The Unique Challenge of YouTube Collections

Nowhere is this problem more prevalent than on YouTube, where size and visibility are even more difficult. Some users deliberately circumvent YouTube’s copyright laws by uploading and distributing remixes, slow-down/speed-up remixes or similar versions specifically for the purpose of violating Content ID . Detection is difficult, and much of this crime goes unnoticed. Even when a violation of the law is flagged, it is not possible to return unused fees. Artists are left to move in an invisible, complex way, often leaving their rights exposed and their earnings diminished. For many independent artists, YouTube is a key, major source of income and copyright theft takes that money away with little help.

Industry wide implications

Privatization and quality control make the process ripe for abuse because the current version often benefits the infringer. But solving the core issue requires more than adding cases. There needs to be quality control metrics that are transparently applied and prevent fraud, while protecting rights holders. Transparent rules to ensure that flagged content does not generate revenue for criminals as well as improved early detection systems will help ensure accountability and visibility. A practical and durable security system will:

A. Prevent infringing content from reaching the audience at all
B. Mandate greater transparency when violations occur, and
C. Ensure fair compensation for rights holders.

Bridging the knowledge gap and developing industry-wide standards are also important for meaningful change. By raising public awareness, providing a forum where artists and copyright holders can report violations and increasing pressure within the industry, the path to change can be achieved – and it’s like the rules. used to prevent some types of online piracy.

A Call to Corporate Responsibility

Setting clear timelines for making changes will hold platforms and vendors accountable while improving transparency. In fact, despite the volume challenges, even en-masse DIY publishers must show basic respect for IP and prioritize rights holders/artists while promoting ( and prevent) evildoers who despise them.

With a concerted, industry-wide effort, digital music distribution can become a sustainable model that supports independent artists while upholding their rights. A system that empowers artists while maintaining integrity is essential to preserving the value of music and protecting it from exploitation.

George Karalexis is the co-founder/CEO of Ten2 Media. His expertise as a media executive, strategy consultant, and modern entrepreneur spans over 15 years of multi-departmental leadership, with a focus on music, marketing strategy, and strategic team building. . Donna Budica is co-founder/COO of Ten2 Media. With a finance degree from the Wharton School and an MBA from USC Marshall, he leads strategy and business operations at Ten2 and its subsidiaries.

Ten2 Media is a rights management and content marketing company specializing in content monetization, audience development and content development on YouTube. Ten2’s expertise in YouTube and decades of experience in the music industry is the foundation of a unique approach to increasing revenue and promoting music for the world’s leading artists and labels.