Michael Smith, 54, admitted in March that he had generated hundreds of thousands of songs using AI and then used bots to stream them several billion times on various streaming services through thousands of fake user accounts.
It is the first time anyone has been convicted at the federal level in the US for an activity that has plagued the music industry for years. Payments to individual creators from streaming are, simply put, distributed from a pool based on all listens. So, if huge numbers of AI-generated songs take a large slice of the pie, “human” songwriters and artists could receive less.
Using AI in songs is not prohibited per se on most streaming services. However, AI-generated “nonsense music”, or “spam tracks”, as it is called, is clearly being uploaded in large quantities to streaming services in an attempt to deceive users and thereby obtain payments.
Last year, Spotify revealed that 75 million "spam tracks", including many AI-generated songs, had been removed from the service in the previous year.
Facts: How the money from streaming services is distributed
Contrary to popular belief, songwriters are not paid a fixed amount each time a song is played on a streaming service like Spotify.
Instead, the payment model works by pooling the portion of revenue that Spotify, for example, receives during a month and is due to pay out. The pool is then distributed to each creator according to their share of the total number of listens on Spotify during that period in each country.
If someone creating AI-generated music manages to manipulate the system and get their tracks played on Spotify, they can claim a share of the revenue from the pool, meaning the share distributed to "real" artists will be smaller.
Payments also vary from country to country, with higher amounts for streams in Europe and North America and lower amounts in other parts of the world.
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