16 October, 2024
Spotify follows Meta, YouTube and others by offering AUX, a service to connect brands and creators
Facebook, Instagram, Snap, YouTube and other social networking companies offer programs to connect creators with brands, and now Spotify is doing the same. The company announced the launch of AUX, its new in-house “music advisory agency” for brands. While not necessarily a creator marketplace, the program has a similar aim — it will facilitate connections between brands and emerging artists for various campaigns benefiting both parties.
For Spotify, AUX represents another source of income, as well, as the company says brands can pay Spotify to leverage the new service.
The consultancy’s first client is Coca-Cola, which sees the beverage giant teaming up with Berlin-based DJ, producer, singer and songwriter Peggy Gou. Together, the brand and artist have established a long-term partnership that will include live concerts, events, social media content, a branded playlist and on-platform promotional support.
The move sees Spotify taking a more proactive stance in helping to facilitate connections and offering its music expertise to brand partners, but it also positions the platform as more akin to a social network, where creators strike brand deals to pay the bills. The launch, notably, follows that of Spotify’s updated payment model, which arrived late last year, promising to drive an additional $1 billion toward artists. But critics of the model said that it did little to support emerging artists, and in fact, would cut payments to artists who already receive less, to boost payments to those who received more.
Now, Spotify is offering those artists cut out of the benefits of the new streaming royalties model a new way to make money by partnering with brands.
“Spotify AUX will broaden the opportunities available to artists, offering them a platform for creative expression, financial support, and strategic partnerships that go beyond traditional industry avenues,” the company explained, in a blog post.
“We are proud to be an early partner to AUX, which integrates Spotify’s expertise to enable authentic connections with music fans worldwide,” said Joshua Burke, global head of Music & Culture Marketing at The Coca-Cola Company, in a statement shared by Spotify. “This is a natural progression of our long-standing partnership with Spotify and marks a key milestone for our commitment to artists and the music community. We are excited to launch Coke Studio at Spotify LA, which will provide recording support for emerging artists and a platform to promote their music.”
Though Spotify touts AUX as giving artists another opportunity to “live off their art,” artists and musicians would likely rather get paid better for their streams, rather than having to forge brand deals like social media creators and influencers do.
However, the overabundance of music offered by today’s streaming services — where 120,000+ tracks are uploaded to services daily — means it’s harder for new and emerging artists to be discovered, build an audience and get paid. And while Spotify today offers over 100 million tracks, AI tools could lead to a flood of AI-generated music over time, making things worse. Spotify’s new royalties model with its minimum threshold for streams of songs, further complicates an already tough situation, necessitating artists to consider brand deals as a means of growing their income.
“Spotify is always looking for ways to leverage our music ecosystem to deepen the connections between artists, brands, and fans,” said Jeremy Erlich, VP, head of Music Content at Spotify, in a statement. “AUX is a natural step for us to help brands strengthen their music strategy and better connect with new audiences through our expert insights and observations from our music team, tailored to meet brands’ needs,” he added.
Meta, Match, Coinbase and others team up to fight online fraud and crypto scams
Hosting scams on your platform is bad for business, which is why on Tuesday, a group of major tech companies including Match Group, Meta, Coinbase and others are jointly launching a new coalition to take on online fraud across dating apps, social media and crypto.
The new coalition, Tech Against Scams, will work to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.
Even before series like “The Tinder Swindler,” romance scams have been costing users significant sums. According to the U.S. Federal Trade Commission, this type of scam cost its victims more money than any other type of consumer fraud as of 2019. Fraud on social media is an issue, too: U.S. consumers lost $770 million on social media scams in 2021, up 18 times over 2017. Last year, the FTC also reported that investment scams led to consumer losses of more than $3.8 billion, or more than double the amount lost in 2021.
And then there is, of course, crypto, an industry so rife with fraud that company founders and other industry notables are going to jail for fraud and grift, money laundering, hacks and more. A whole blog spun up just to keep track of the latest fallout in this space, in fact.
Though this fraud takes place on the platforms, as opposed to being committed by the platforms themselves (well … outside of crypto), allowing it to run rampant can give the tech companies a bad reputation. What’s more, many of the scams span platforms, like how a dating app scam may eventually drive a user to a crypto exchange, for example. That has led to increased demand for better data-sharing between companies to help combat the problem.
Joining Meta, Coinbase and Match (the parent company to Tinder, Hinge and others), are others in the crypto space like Kraken, Ripple and Gemini. Together, the firms plan to work to protect their users against romance scams and other types of fraud, like the crypto scam known as “pig butchering.” The latter is a long-term scam involving investment fraud, where the victim is lured into making crypto investments. The scammer often targets users on social apps, befriending them or building trust with communication before stealing their funds.
With AI, the difference between scams and real-life interactions is getting harder to detect, too. As Yahoo Finance reported last year, scammers are using AI to create “persuasive FaceTime calls, phone calls, and emails” to their victims, where they may pose as loved ones, prospective lovers, friends or even IRS agents.
“Tech companies across industries collaborating with each other is essential in preventing criminal activities, and ultimately helps online platforms stay ahead, develop effective solutions, and address various types of financial crimes,” said Yoel Roth, VP of Trust & Safety at Match Group, and formerly of Twitter. “As we aim to make it harder for scammers to defraud online users, we will also continue investing in features to help disrupt fraud and remove scammers from our platform before they commit harm.”
Meta Chief Security Officer Guy Rosen added that the companies needed to join forces to fully tackle this problem. “Scammers and the organized criminal groups behind pig butchering schemes target people across many internet services, making it hard for any one company to see the full picture of malicious activity and counting on each of us working in silo,” he noted.
To protect users from fraud on their respective platforms, the companies will share tips and information with one another. They’ll collaborate on ways to educate and protect consumers against the ever-evolving crop of financial scams on the market. The coalition members will also continue to work with law enforcement, when necessary, to support their investigations by sharing information about online fraud and crimes that took place on their platforms.