Universal Music has sued DistroKid, accusing the market leading DIY distributor of employing “illegal, deceptive and unlawful practices” to “fuel its rapid growth”, leading to its “recent $2 billion valuation”. And those practices “threaten legitimate players” across “the music economy”, including Universal’s labels and own distribution businesses, and all the artists they work with.
DistroKid “gives the false impression that the music it distributes consists of artist-backed releases, created and owned by real human artists”, Universal says in a new legal filing.
But in fact - the major then claims - a significant number of the recordings the distributor delivers to the streaming services are either AI slop or copyright infringing tracks. And “DistroKid embraces all of this bad-actor conduct” because it “benefits its growth and corresponding market valuation”.
The lawsuit was filed the day after Universal joined with Sony Music and Warner Music and a stack of independent distributors to launch the Streaming Integrity Initiative, dubbed as a “new industry commitment to combat streaming fraud”.
It was notable that DistroKid was not among the list of distributors backing that scheme and we now know why. Universal, at least, sees DistroKid as part of the problem rather than part of the solution.
The major’s lawsuit is built around two main gripes. First, that DistroKid is directly involved in streaming fraud, specifically on the input. So, DistroKid customers upload copyright infringing tracks - ie music from other artists often remixed, sped up or slowed down - in the hope it gets through any content checks at the streaming platforms, allowing the uploader to pull down royalties when that music is streamed.
And when content checks employed by any one platform - such as YouTube - do spot an infringement, Universal claims that DistroKid often accepts that its user does not have the rights to distribute the track with that one platform, but then “continues to distribute that exact same recording to other digital services”.
The second gripe relates to so called AI slop, where individual DistroKid customers upload thousands of entirely AI-generated tracks each year, usually with artist and song titles designed to appear in common search results within the streaming services.
Although Universal’s lawsuit alludes to the fact this music could be subject to streaming fraud on the output - ie people uploading the content might use stream manipulation to boost streams - the major actually takes issue more generally with DistroKid’s AI music pipeline.
The problem, it says, is people and companies using DistroKid to flood streaming platforms with huge quantities of search-optimised AI-generated music that isn’t clearly labelled as such, and is therefore “masquerading as something it is not”.
This affects Universal, of course, because with the music streaming business model there is a finite royalty pool each month that is shared out across the industry. If some of that money is allocated to AI slop or copyright infringing tracks there is less money for everyone else.
DistroKid itself doesn’t directly benefit from the money that flows to the uploaders of that content, because it works on a fee model rather than taking a commission. However, the argument goes, by operating as a pipeline for AI slop and copyright infringing content - in addition to the millions of legit artists who use the platform - it can charge more fees and claim more market share.
In addition to the straightforward copyright infringement claims, Universal alleges that DistroKid employs unlawful deceptive trade practices. By using the legit bit of its business - and its involvement in anti-fraud initiatives - to cover up the allegedly dodgy bit of its business when presenting itself to artists, industry and the streaming services it has licensed deals with.
While not involved in the all-new Streaming Integrity Initiative, DistroKid is an active member of the longer established Music Fights Fraud Alliance, which was set up by a group of music distributors to tackle the various kinds of streaming fraud.
Universal argues that DistroKid’s participation in the Music Fights Fraud Alliance is part of the deception. Seeking to back up that claim, it says DistroKid has access to an MFFA database that identifies tracks that have been delisted by streaming services or other distributors due to fraudulent activity.
“Certain artists that have been banned by other open-access distributors have hundreds of flags in the MFFA database”, the lawsuit says. “Yet, DistroKid has welcomed many of those same bad actors as account holders” and even distributed specific tracks “that have been flagged by their prior distributors”.
Of course, whether or not any of Universal’s allegations are true, DistroKid does still have a sizable legit business distributing music for DIY and independent artists.
Which is something Universal very much plays down in its legal filing, as it did when it filed a very similar lawsuit against Believe and its TuneCore DIY distribution platform two years ago.
That 2024 lawsuit similarly claimed that Believe had achieved “dramatic growth” by “operating as a hub for the distribution of infringing copies of the world’s most popular copyrighted recordings”. The Universal v Believe legal battle was settled out of court in April this year.