Music Streaming Fraud: The New Problem After Piracy?

Introduction into the Dark Side of Music  

In the first quarter of the 21st century, we have been confronted with the emergence of music streaming services. At the start of the 21st century, online music revenues consisted of mostly of “a-la-carte” downloadable music (via iTunes), mobile music (remember Apple’s iPod) in the second place, and physical music in the third place. Streaming music – which erupted by the launch of Spotify in 2008 - did not exist on a global scale until 2010-2015, becoming the largest source of revenue in the Music industry in 2015.

In the first decade, IFPI reported that piracy was the biggest threat for music and the online market. In 2025, streaming is dominant accounting for 80% of market revenue. While the combined market of physical and digital music was plummeting from approximately $ 20.7 billion in 2005, to $ 19.6 billion in 2006, in 2024, streaming constituted 69 percent of recorded music revenues worldwide, signalling a profound transformation in the music industry.[1] With this shift, the industry has entered a new legal era: the protection of rights, accurate royalty allocation, and market integrity depend on the reliability of streaming data.

The trigger for this article: fraud case at BumaStemra

So how reliable is streaming data and the system of royalty distribution? As two Amsterdam-based lawyers, this question struck us, after the general members’ meeting of the Dutch collective music rights organization (CMO) Buma/Stemra was abruptly cancelled in May 2025, just one day before it was due to take place.[2] The cancellation followed reports of fraud, which prevented the auditor from signing off on the annual accounts. According to Dutch press coverage, ‘dozens of cases of fraud’ had been uncovered, involving approximately €107.000 that had been distributed to fraudulent accounts. During an internal audit at the end of April 2025, it was discovered that fraudsters used false documents to become member of Buma/Stemra and receive remuneration for the use of music. Among other things, forged non-Dutch identity documents were used. The president of Buma/Stemra confirmed that 81 suspicious accounts had been blocked. These accounts had collectively submitted nearly 900 musical works for which royalties were claimed and paid out.

Although the individuals behind the scheme remain unidentified to date, the episode illustrates that fraud is no abstract problem. It strikes at the heart of the collective management system, with real consequences for transparency, governance, and trust in the music industry. The core problem with such schemes is not only the unlawful enrichment of fraudsters, but also the financial and image harm inflicted on legitimate rightsholders. Because royalties are distributed from a common pool, every euro diverted to a fraudulent account is one less for genuine artists, composers, lyricists, publishers and labels. In this way, fraud does not merely distort reporting figures; it directly undermines the trust and fairness upon which CMO’s (like Buma/Stemra) depend.[3]

The Bigger Problem: Manipulating Streaming Data  

Moreover, fraud extends beyond rights registration and frequently takes place on the streaming platforms themselves, where play counts are artificially inflated. Fraudulent streaming is a theft of revenues that should have gone to legitimate artists and authors, but the implications reach further than royalty misallocation. Manipulated streams skew platform recommendation algorithms, making it harder for authentic artists to have their music discovered. They also corrupt the consumer data that artists and their teams increasingly rely upon to plan tours and marketing campaigns, thereby narrowing the already limited opportunities available to emerging talent seeking a foothold in the business. 

The problem is, of course, not limited to the Netherlands but extends across borders, with its impact magnified on a global scale. According to the International Federation of the Phonographic Industry (IFPI), the streaming market was valued at approximately €18 billion in 2024. Even if Apple Music’s estimate, that fraud accounts for “less than 1%” of activity, were correct, this would still represent hundreds of millions of euros in losses each year, as The Guardian has calculated.

In this article, we will outline the various methods employed in fraudulent schemes (paragraph 2), provide an overview of international case law together with our key takeaways (paragraph 3), examine the measures currently implemented by streaming platforms (paragraph 4), and conclude with our recommendations for the future (paragraph 5).