One $10 Million Royalties-Heist Indictment Later, Is Boomy’s ADA/Warner Music Deal Still Alive? Here’s What We Know

Germany-based Katirha, one of the Boomy users who’s distributed music under the AI-powered platform’s ADA deal. Photo Credit: Boomy

Last year, Boomy inked a high-profile distribution tie-up with Warner Music’s ADA. Is the deal still on after the AI music generator’s CEO was reportedly named as a co-conspirator in a massive fake streams scheme? DMN set out to answer that question in the wake of the indictment of one Michael Smith, a North Carolina-based musician who’s been accused of wire fraud and more for allegedly masterminding the mentioned royalties scheme. In short, according to the indictment, Smith throughout the better part of a decade harnessed AI to pump out hundreds of thousands of tracks.

After uploading these tracks to major on-demand platforms, the defendant then allegedly scored over $10 million in royalties by using bots to stream the songs, per the indictment. Smith is the lone defendant at present, but he isn’t the only individual who had a hand in the alleged scheme.

To be sure, the indictment describes a 2018 deal between Smith and “the Chief Executive Officer of an AI music company,” whose business allegedly began supplying the computer-generated works at the heart of the purported scheme.

Prosecutors didn’t mention Boomy CEO Alex Mitchell by name, but his involvement as one of the co-conspirators highlighted in the indictment subsequently emerged. And while the fact is valuable, it wasn’t particularly difficult to uncover.

That’s because Mitchell, who seemingly did more than allegedly provide AI creations to Smith, is named as a co-author on thousands of tracks with the defendant in the MLC database. While hindsight is 20/20, registering north of 200,000 of these works under Smith’s name (with 5,119 attributed to Mitchell) to collect compositional royalties wasn’t exactly subtle.

Furthermore, at least as things are laid out in the indictment, the curiously brazen move contrasted other elements of the calculated alleged scheme. For instance, the defendant was allegedly careful to direct a small number of streams to each track so as to avoid raising suspicion.

Shifting the focus to where the cards will fall in the wake of the alleged scheme, there are obvious questions about the future of Boomy and especially its ADA distribution deal.Finalized after Spotify booted thousands of Boomy tracks due to alleged fake streams – besides temporarily blocking the AI music company’s releases before implementing a distributor fine for streaming manipulation – the underlying agreement was formally announced in November of 2023.

But it’s unclear where things go from here. At the time of writing, neither Mitchell nor ADA/Warner Music (which previously invested in the AI music platform) had responded to a request for comment.

The radio silence from the involved parties, on top of a lack of news on the original affidavit, means we’ll have to rely on existing evidence. And as things stand, this evidence points to business as usual for Boomy and ADA.

Once again at the time of writing, the AI music generator’s website was still up and running, with a continued emphasis on ADA-partnered Boomy’s distribution capabilities. However, the timing of some recent changes at Boomy might not be coincidental.Per an FAQ response that was updated 12 days back, only Boomy paid accounts – Pro and Creator, that is – “are enabled for distribution.” Free accounts, on the other hand, “must upgrade in order to release their songs to streaming platforms.”

The adjusted policy marks a departure from late April (and possibly a more recent date), when, per a screenshot captured by the Wayback Machine, free users could “release 3 singles or 3 albums per month, with up to 12 tracks on an album.”