Streaming platforms like Spotify, Apple Music, and YouTube are intensifying their efforts to combat fraudulent activity, aiming to deter artists from engaging in streaming fraud.
Starting in April 2024, Spotify will impose a monthly penalty of €10 on labels and distributors for each track identified as having significant artificial streaming activity. This charge will be passed on to the account holder by Gallery Vision, deducted from your account balance and/or the payment method linked to your account, in your local currency. You will also receive an invoice and an email notification sent to your primary email address, detailing which tracks have been affected.
In addition to the fee, Spotify reserves the right to exclude artificial streams from your official sales reports and listener-facing play counts, even if these streams still appear in your Spotify for Artists profile.
Consequences of Receiving a Penalty Notice
If you receive a penalty notice, tracks with significant levels of fraudulent streams will be removed from all streaming and download platforms. Once a track is removed due to artificial streaming, you will not have the ability to reupload or redistribute it. Additionally, depending on the extent of fraudulent streaming activity detected across your account, your Gallery Vision account may be subject to complete shutdown.
Why Am I Being Charged a Penalty If I Didn’t Pay for Streams?
Receiving a penalty notice means that Spotify's fraud team has identified a substantial number of artificial plays associated with your account. As outlined in Spotify's blog regarding the modernization of their royalty system:
Spotify invests significantly in the detection, prevention, and elimination of the financial impact caused by artificial streaming. This new measure follows the introduction of enhanced artificial streaming detection technology earlier this year and the creation of the Music Fights Fraud Alliance.
Using a sophisticated, proprietary approach to pinpoint fraudulent streams, Spotify then communicates the identified tracks back to distributors, labels, and other content providers. At that point, they impose a €10 fee per track on those providers, which will be passed on to the account holder at Gallery Vision in their local currency.
Is the €10 Penalty a One-Time Charge?
The €10 penalty is not necessarily a one-time fee. You may incur penalties multiple times, leading to a series of charges over time. The €10 fee is applied on a per-track, per-month basis. For example, if one track appears on Spotify’s fraud report, you will be charged €10 for that month. However, if five tracks are identified in the same month, you will incur a total charge of €50 (€10 for each track).
If a track continues to appear on the fraud report in subsequent months, you will be charged the €10 fee each month it remains identified.