Company
Beatdapp
Beatdapp, as described on the show by Andrew Batey and Morgan Hayduk.
Episodes (3)
Beatdapp co-founders Andrew Batey and Morgan Hayduk explain how streaming royalty fraud and money laundering work, and how AI music changed the game.
Con Raso of Tuned Global and Andrew Batey, founder of Beatdapp, explain how machine learning catches music streaming fraud and why it pays real artists more.
Morgan Hayduk and Andrew Batey, co-founders of Beatdapp, explain how they built streaming fraud detection and raised a $17 million Series A.
Questions these episodes answer
How does fraud actually work on music streaming platforms?
Batey explains that streaming royalties are paid from a shared pool rather than a fixed rate per stream, so every play a fraudster fakes takes a slice of money that would otherwise go to a real artist. Because the pool is finite and everyone competes for a share of it, running up fake streams directly extracts money from other people.
From: Industrial-Scale Money Laundering in the Music Industry
How does AI make music streaming fraud easier?
Batey says fraudsters used to need hacked user upload platforms or obscure old recordings from Africa, Latin America or Asia just to have enough content to run their schemes. AI removed that barrier, since generating large volumes of new filler tracks became simple, feeding fraud operations that need constant new songs to hide behind.
From: Industrial-Scale Money Laundering in the Music Industry
How is the music industry used for money laundering?
Batey describes organized crime converting cash into cryptocurrency, paying streaming farm operators to run fake plays on specific songs, and then collecting the resulting royalty payouts through shell companies set up in places like Doha, Canada, Hong Kong or Cyprus. Because the industry is largely unprotected, a few hundred million dollars can move this way without anyone noticing.
From: Industrial-Scale Money Laundering in the Music Industry
Why did Beatdapp refuse investment from music labels and streaming services?
Batey and Hayduk say they turned down money from any distributor, streaming service, label or other strategic investor from the very beginning, even though those insiders are usually the easiest source of early funding for a music startup. They wanted Beatdapp to be seen as a neutral referee on fraud, with no perception that any single industry player had influence over its findings.
From: Industrial-Scale Money Laundering in the Music Industry
Can AI models be traced back to the copyrighted songs they trained on?
Hayduk says attribution is still unresolved: nobody can currently prove with precision which underlying copyrighted works in an AI model's training data produced a specific piece of generated output. He treats claims of solved attribution with skepticism and says the technical problem has not actually been cracked yet.
From: Industrial-Scale Money Laundering in the Music Industry
What kind of fraud does Beatdapp detect in music streaming?
Beatdapp sits underneath streaming services and analyzes thousands of data points per stream, including battery level, gyroscope orientation and what a user does before and after playing a track, across more than 600 machine learning models. About 80 percent of what it catches is financially motivated fraud run by organized crime, money launderers and even terrorist organizations, rather than real artists trying to game the charts.
From: How Tuned Global and BeatDapp Are Unmasking Fraud In Music
Does removing streaming fraud reduce how much money real artists earn?
No, Batey says the opposite happens: removing fraud reallocates the same pool of royalty money rather than shrinking it. He describes one artist whose streams were 47 percent fake in its first month, and even that artist earned 9 percent more once all the fraud across the whole platform was cleaned up, well beyond their own.
From: How Tuned Global and BeatDapp Are Unmasking Fraud In Music
How much money could be flowing through streaming platforms as fraud?
Batey estimates that roughly a billion dollars a year could be laundered through streaming services without detection, aided by the fact that fraud is spread across many distributors and platforms so no single point of failure shuts it down. He notes that just last month over 50 DIY distributors had more than half of all their streams flagged as fraudulent.
From: How Tuned Global and BeatDapp Are Unmasking Fraud In Music
What happens to distributors who built revenue on fraudulent streams once fraud detection becomes standard?
Batey says a distributor that grew its numbers partly through fraud can face clawbacks, since the fraudulent payouts get treated as advances the distributor now owes back, and its valuation can collapse once a buyer audits the real, non-fraudulent stream count behind its revenue.
From: How Tuned Global and BeatDapp Are Unmasking Fraud In Music
Should music startups raise money from venture capital firms?
Batey advises against chasing traditional VC money for a music startup, since roughly three quarters of music companies get acquired for under 15 million dollars, which does not fit the 50x to 100x return most venture funds need. He recommends raising instead from angel investors who genuinely care about the problem the company is solving.
From: How Tuned Global and BeatDapp Are Unmasking Fraud In Music
What problem does Beatdapp solve in music streaming?
Beatdapp finds fraud inside the large data sets that determine how streaming royalties get split among rights holders. It began as an audit tool for royalty statement discrepancies and discovered those discrepancies were actually caused by fraud rather than bad DSP accounting, positioning it as a neutral third party that helps both rights holders and platforms fight the same problem.
How much of the fraud Beatdapp catches is financially motivated?
Andrew says about 80 percent of the fraud Beatdapp catches is financially motivated, meaning people quietly siphoning off royalty payouts, rather than attempts by artists or promoters to build a fake fan base or chart position.