According to Beatdapp Software, a music data tracking firm that describes itself as a “leading authority in fraud detection,” streaming fraud takes around $2 billion out of artists’ royalties per year, distributing that money to the owners of low-quality content designed to skim cash from streaming revenues.
“No one notices that a few pennies are going to this song and a few pennies are going to that song but, in aggregate, they can steal billions of dollars,” Beatdapp co-CEOs Andrew Batey and Morgan Hayduk told Sky News recently.
“That money would have gone to real artists that would have been used to pay out managers and agents and lawyers, labels, distributors. But instead it’s syphoned off and it goes to professional scammers who are just stealing from the industry.”
Beatdapp is certainly doing its part to combat the problem, partnering with various music industry firms to give them access to its fraud-detection systems.
The latest such partnership is with Beatport, the EDM-oriented digital music service that specializes in servicing DJs.
Beatport will integrate Beatdapp’s fraud-detection technology, allowing it to deliver “daily, weekly, and monthly streaming charts devoid of manipulation or fraud” and “providing users with accurate insights into music trends and consumption patterns,” the companies said in a statement released on Tuesday (July 9).
Beatdapp says its technology analyzes massive sets of data to detect fraudulent streams, ensuring rightful payouts for artists and rights holders. The company says it analyzed more than 2 trillion streams and 20 trillion data points in 2023.
“We launched streaming products under the Beatport and Beatsource brands in 2019, and despite the fact that they have not historically been a target for streaming fraud, suspicious activity has been on the rise in recent months,” said Helen Sartory, Chief Revenue Officer at The Beatport Group.
“Although our fraud rates still remain half that of the industry average, we rely on accurate streaming data not only to preserve fair compensation to artists and labels, but also for track recommendations and analytics. We are excited to be able to work with Beatdapp to ensure that our data is representative of authentic listener engagement.”
“Despite the fact that [Beatport prpducts] have not historically been a target for streaming fraud, suspicious activity has been on the rise in recent months.”
Helen Sartory, Beatport
Beatport, which launched as an online music store in 2004, tried its hand at competing with Spotify as a music streaming service back in 2015, but quickly backed out. Since then, it has reinvented itself as a music resource for DJs, acquiring the assets of DJ streaming service Pulselocker in 2018, and launching a subscription music service for DJs in 2019.
Since then, the company has made a series of acquisitions that has given it a bigger footprint in the DJ music business, including acquiring sound pack and plugin retailer Loopmasters in 2020; music discovery portal LabelRadar in 2022; and music industry tech company ampsuite that same year.
In 2023, it took a majority stake in International Music Summit (IMS), which owns the annual EDM festival IMS Ibiza. That year, Beatport also struck up a partnership with Believe-owned DIY distributor TuneCore, enabling TuneCore artists to distribute their music to Beatport users.
“At Beatport, we have always been committed to leveraging cutting-edge technology to enhance the music experience for our users.”
Robb McDaniels, Beatport
“At Beatport, we have always been committed to leveraging cutting-edge technology to enhance the music experience for our users,” Beatport CEO Robb McDaniels said.
“Partnering with Beatdapp aligns perfectly with our mission to tackle the issue of streaming fraud proactively, ensuring a fair and transparent environment for artists and listeners alike.”
Beatdapp’s Batey and Hayduk added that they’re “thrilled to collaborate with Beatport, an industry leader that shares our commitment to combating streaming fraud. Together, we will ensure that artists receive fair and accurate compensation for their work, while providing users with confidence in the legitimacy of their streaming numbers.”
“At Beatdapp, our mission is to protect the digital frontier of the music industry. By integrating our fraud detection technology with Beatport’s platform, we’re empowering artists and rights holders to receive fair compensation for their creative endeavors,” Beatdapp CTO Pouria Assadipour said.
“By integrating our fraud detection technology with Beatport’s platform, we’re empowering artists and rights holders to receive fair compensation for their creative endeavors.”
Pouria Assadipour, Beatdapp
For Vancouver-headquartered Beatdapp, the deal with Beatport is just the latest in a series of partnerships the company has inked over the past year, perhaps most notably one with Universal Music Group that came as Beatdapp raised USD $17 million in a new funding round.
Beatdapp also inked a partnership with social music platform Hangout FM, and another with AI music startup Boomy – a deal that came months after Boomy faced embarrassment when it was blocked from uploading music to Spotify over concerns of streaming fraud.Music Business Worldwide