Stop us if you saw this problem coming a mile off. People can bet (sorry, trade) on prediction platform Kalshi on topics including whether specific artists will top Spotify’s charts or hit certain streaming milestones.
People can also use dodgy services to buy fake streams on Spotify for specific tracks. And if you’re trading at scale, the costs of buying a load of fake streams are outweighed by how much money you could win.
So, this was inevitable: Spotify has been forced to remove more than 500k streams of a song that topped its US chart after – in the Financial Times’s words – “discovering that the surge in streaming coincided with a jump in suspicious wagers on prediction market Kalshi”.
The track in question is ‘Earrings’ by artist Malcolm Todd, and yet as the FT makes clear, “there is no suggestion that Todd or his team were involved” in any of these shenanigans.
The Kalshi traders who had placed big wagers on Todd having a number one song on Spotify’s US chart in June, on the other hand… Well, you can join the dots on who might have been responsible for the streaming manipulation – and Spotify certainly has.
“All streaming services face ever-changing stream manipulation. Spotify has best in class detection and mitigation practices for manipulated streams, and we don’t pay out associated royalties,” its spokesperson told Music Ally.
Wired has more details on all this, drawing on evidence collected by Caleb Davies, a successful trader on prediction platforms, who described the likelihood of ‘Earrings’ topping Spotify’s US chart as having “a roughly 1 in 77 octillion chance of happening randomly”.
Kalshi’s spokesperson told Wired that “we’re in touch with Spotify and are actively investigating this matter”. The report also claims that Spotify requested that Kalshi remove the streaming service’s logo from its platform, which it has done.
As we reported earlier this year, music is already a significant segment for Kalshi, with more than $400m of trades on music in the first four months of this year alone – including $110m alone on what song Bad Bunny would open his Super Bowl half-time show with.
As this market grows, so does the incentive to manipulate streams. It’s a new headache for Spotify, whose public data means it’s the main streaming service being used as the verified source for all this activity.
It’s also a bad development for artists. Think about traditional streaming manipulation, where the guilty party is almost always the uploader of the music – whether that’s a musician/rightsholder trying to juice their streams or, more often, organised criminals deploying a catalogue of AI slop.
When that’s detected, they get punished. But in this case, Malcolm Todd, his team and label Columbia Records aren’t being accused of any involvement in streaming manipulation.
It’s fair – if bruising for the artist – to remove the 500k fake streams, but one of Spotify’s jobs now is to ensure Todd and his label don’t face any further penalties under its systems for punishing manipulation.
That should be easy enough. The next challenge will be to decide what to do about the prediction markets. Does Spotify work with them to better identify suspicious trading patterns linked to suspicious streams, or does it cut them off from its data altogether – if that’s possible?
For more on the implications of prediction markets, check out our recent The Price of Music episode digging into this topic: it’s on Spotify and Apple Podcasts, as well as other podcast services.
