--- title: "Songwriters ask copyright judges to kill the Spotify bundle that cut their streaming pay nearly in half" description: "The Phonorecords V rate case opened on October 5 on a per-stream pool the same week's record shows leaking: 260,000 deepfake takedowns, an 18-month, $8 million fraud sentence, and a federal inquiry into royalty dilution." publisher: "The Inference" section: "Policy" published: 2026-10-10T21:17:38.844Z modified: 2026-10-10T21:17:38.844Z canonical: https://theinference.org/article/songwriters-ask-copyright-judges-to-kill-the-spotify-bundle-that-cut-their-streaming-pay-nearly-in-half language: en keywords: "Spotify, Sony Music, Copyright, Streaming, AI, Music Industry" --- # Songwriters ask copyright judges to kill the Spotify bundle that cut their streaming pay nearly in half > The Phonorecords V rate case opened on October 5 on a per-stream pool the same week's record shows leaking: 260,000 deepfake takedowns, an 18-month, $8 million fraud sentence, and a federal inquiry into royalty dilution. ## The crime was the plumbing In April 2023, Michael Smith's bot accounts played his AI-generated catalog 80.9 million times on YouTube Music family plans; Taylor Swift's whole catalog drew 9.3 million that month, [a comparison prosecutors filed in court](https://www.musicbusinessworldwide.com/man-behind-8m-ai-song-and-bot-streaming-fraud-is-sentenced-to-18-months-in-prison/). [1] On October 6, Judge John G. Koeltl sent Smith to prison for 18 months and ordered him to forfeit $8,091,843.64, in what both sides call the first criminal prosecution of its kind in the US. [1][2][3] Services pay songwriters from a pool divided by each track's share of plays, and Smith's bots only had to join it. The Music Fights Fraud Alliance told the court every fraudulent stream "diluted the value of every legitimate stream occurring during the same accounting period." [1] ## The rate fight assumes a clean pool A day earlier, on October 5, [the Copyright Royalty Board's Phonorecords V opened](https://www.billboard.com/pro/songwriter-streaming-royalties-phono-v-rate-explained/), with direct cases that will set the US mechanical rate for streaming from 2028 to 2032. [4] The priority fight is [Spotify](https://theinference.org/markets/companies/spotify)'s bundle: after [audiobooks went into Premium plans in spring 2024](https://theinference.org/article/spotify-s-12-hour-audiobook-cap-goes-to-more-than-180-markets-two-days-after-ubs-cut-its-target-to-675), mechanical payments on premium streams fell by nearly half, and the NMPA counts $500 million missed by songwriters and publishers since bundling began at Spotify and [Amazon](https://theinference.org/markets/companies/amazon). [4] No settlement is expected this time. [4] ## The week's receipts on the leak [Sony](https://theinference.org/markets/companies/sony) Music disclosed [more than 260,000 takedown requests against AI deepfakes](https://www.musicbusinessworldwide.com/sony-music-has-now-asked-platforms-to-remove-more-than-260000-ai-deepfakes-imitating-artists-like-harry-styles-adele-and-michael-jackson/) of its artists by end-September, nearly double the 135,000 sought by end-March, a pace above 20,000 requests a month across Q2 and Q3. [5] Enforcement, Sony says, is "becoming an uphill struggle." [5][6] *Chart: **Sony's deepfake takedown tally nearly doubled in six months** Sony Music's cumulative AI deepfake takedown requests, rising from about 10,000 in November 2023 to 260,000 by September 2026.* *Cumulative takedown requests by Sony Music against AI deepfakes of its artists, in thousands, at each disclosure date. Sources: Music Business Worldwide, October 5, 2026; Music Ally, October 5, 2026. [5][6]* Deezer, which tags AI-made tracks, says fully AI uploads passed half its daily intake in June, about 90,000 a day, and that up to 85% of the streams they drew in 2025 were fraudulent. [7][8] *Chart: **AI tracks flood Deezer's uploads, not its listening** Column chart comparing three reported Deezer shares: fully AI tracks passed half of daily uploads, drew 1 to 3 percent of listening, and up to 85 percent of the streams they drew were fraudulent.* *Deezer's own accounting of AI-generated tracks: uploads passed half of daily intake in June 2026, but fully AI tracks drew only 1 to 3% of listening in 2025, and up to 85% of the streams they drew were fraudulent. Upload share shown at 50% as the floor of more than half. Sources: The Next Web, July 22, 2026; Music Business Worldwide, October 7, 2026. [7][8]* ## Washington puts dilution in print On October 7, the US Copyright Office [opened a public inquiry](https://www.musicbusinessworldwide.com/music-streaming-fraud-inquiry-launched-by-us-copyright-office/) that names "the dilution of the royalty revenue pool" as the primary harm of streaming fraud, in a docket counting $9.5 billion in US streaming revenue for recordings. [7][10] Written comments are due November 23. [3][7] Terrecon, a Kyiv intelligence NGO, priced the far edge: 981 suspected AI Russian war-propaganda tracks, built with tools like [Suno](https://theinference.org/markets/companies/suno) and [Udio](https://theinference.org/markets/companies/udio), drew almost 87 million plays across the 608 that publish counters, at commissions of $11 to $330 and as little as two hours' work. [9] ## The other side of the ledger Spotify holds that it used bundle terms every party signed in the last settlement [4], that "all music is treated equally, regardless of the tools used to make it," and that its defenses held Smith's take on its platform to about $60,000. [1] Deezer's own data softens the alarm: fully AI tracks draw 1 to 3% of its listening. [8] Dilution does not need a majority, only a margin, and the Copyright Office has now said so in print. [7] ## Where the money moves For Spotify (NYSE: SPOT), a killed bundle and a raised headline rate land on the cost base just as a federal docket puts its royalty accounting in print. [4] Sony Group (NYSE: SONY) funds the takedown treadmill [5]; Deezer (Euronext: DEEZR) already culls and labels. [7][8] The dated catalysts: Copyright Office comments due November 23 [3][7], a CRB trial in the first half of 2027 [4], and rates that govern 2028 through 2032 [4]. The rate the judges set is only worth the pool it is levied on, and this pool leaks from both ends: bundles shrink it before the split, [bots drink from it after](https://theinference.org/article/spotify-deleted-75-million-spam-tracks-and-its-flagship-playlists-started-shrinking). ## Takeaway The Phonorecords V judges will set US streaming mechanical rates for 2028 to 2032, but the pool they levy on is under pressure from three sides at once: bundles shrink it before the split, bots drink from it after, and the Copyright Office's new inquiry puts the dilution in print. ## Sources 1. [Music Business Worldwide, "Michael Smith, man behind $8M AI song and bot streaming fraud, sentenced to 18 months in prison", 7 October 2026](https://www.musicbusinessworldwide.com/man-behind-8m-ai-song-and-bot-streaming-fraud-is-sentenced-to-18-months-in-prison/) 2. [The Verge, "North Carolina man who used AI for music streaming fraud sentenced to 18 months in prison", 7 October 2026](https://www.theverge.com/ai-artificial-intelligence/1007162/north-carolina-man-who-used-ai-for-music-streaming-fraud-sentenced-to-18-months-in-prison) 3. [Music Business Worldwide, "From Sony Music's 260,000 deepfake takedowns to Suno's live music expansion: it's MBW's Weekly Round-Up", 9 October 2026](https://www.musicbusinessworldwide.com/from-sony-musics-260000-deepfake-takedowns-to-sunos-live-music-expansion-its-mbws-weekly-round-up/) 4. [Billboard, "The Next Battle Over Songwriter Streaming Royalties Has Begun. Don't Expect a Quick Fight", 5 October 2026](https://www.billboard.com/pro/songwriter-streaming-royalties-phono-v-rate-explained/) 5. [Music Business Worldwide, "Sony Music has now asked platforms to remove more than 260,000 AI deepfakes imitating artists like Harry Styles, Adele, and Michael Jackson", 5 October 2026](https://www.musicbusinessworldwide.com/sony-music-has-now-asked-platforms-to-remove-more-than-260000-ai-deepfakes-imitating-artists-like-harry-styles-adele-and-michael-jackson/) 6. [Music Ally, "Sony Music has now filed 260k takedowns of AI-deepfake tracks", 5 October 2026](https://musically.com/2026/10/05/sony-music-has-now-filed-260k-takedowns-of-ai-deepfake-tracks/) 7. [Music Business Worldwide, "Music streaming fraud inquiry launched by US Copyright Office", 7 October 2026](https://www.musicbusinessworldwide.com/music-streaming-fraud-inquiry-launched-by-us-copyright-office/) 8. [The Next Web, "Over half the music uploaded to Deezer is now AI, and most of it is fraud", 22 July 2026](https://thenextweb.com/news/deezer-half-uploads-ai-generated-streaming-fraud) 9. [Cybernews, "AI war propaganda racks up millions of plays on streaming platforms", 10 October 2026](https://cybernews.com/security/ai-war-propaganda-soundcloud-youtube/) 10. [EDM.com, "AI Slop Meets the Music Royalty Pool, and Congress Is Noticing", 8 October 2026](https://edm.com/industry/ai-slop-music-streaming-fraud-royalties-congress-public-inquiry/) --- Songwriters ask copyright judges to kill the Spotify bundle that cut their streaming pay nearly in half — The Inference. Canonical: https://theinference.org/article/songwriters-ask-copyright-judges-to-kill-the-spotify-bundle-that-cut-their-streaming-pay-nearly-in-half