$10M AI Music Scam Duped Everyone & Inflation Cools...Kinda
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Campbell is dropping the soup from its name. Sorry, Andy Warhol. Looks like you'll need to redo your paintings. Then, the story of the man who allegedly gamed the music streaming market and made off with $10 million. It's Thursday, September 12th. Let's ride. ♪

The most watched TV show in the United States has been revealed. And if you're a parent of young kids, you will not be surprised to hear that it is bluey. The animated Australian show about a dog and her family has been viewed for 35 billion minutes so far this year, according to Nielsen. And it's on track to smash the 43.9 billion minutes watched last year when it was the number two show in the U.S. behind Suits.

This seems to be the rare show that kids love and parents would also maybe watch on their own, but wouldn't admit it to you. Even more impressive, though, when you consider the episode length, because Suits episodes are 45 minutes long. It's this big, sprawling legal drama. Bluey episodes much shorter, usually around seven to eight minutes. So it is getting some eyeballs. Also, they released this special episode called The Sign, which drew 10.5%.

million views globally in its first week on Disney Plus. Just to put that in perspective, industry, which is this HBO show that a lot of people are talking about, or seemingly a lot of people, it drew a record viewership of 370,000 viewers across all platforms. So Bluey is just truly in a different league.

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I think we found a real-world version of the movie Inception, but instead of Dreams Within Dreams, this is a story about scams within scams. The Department of Justice recently announced they arrested a 52-year-old North Carolina man named Michael Smith, who reportedly set up a scheme where he used AI to create huge amounts of fake bands to produce fake news.

But he wasn't done there. He then allegedly set up bots to listen to those fake songs and earn millions of dollars in ill-gotten gains from streaming companies. Over the course of seven years conducting this fake music scheme, he made upwards of $10 million very real dollars.

The details of this operation are wild. Smith worked with an AI music company to crank out literally hundreds of thousands of fake songs, then uploaded them to Spotify, Apple Music, YouTube, etc. But when you're posting songs by the thousands, you also need to name them, and boy did Smith have a flair for it. Titles range from

Zymbadooing to Zygotic, while the fake bands went by names like Calorieven and Calypsozord. Neil, this is fraud and streaming platform manipulation on a multi-million dollar scale. It is also the first criminal case involving musical streaming manipulation bought by the Southern District of New York. So this is the first time that they've sort of uncovered a fraud like this. But this is a feature, not a bug, of Zygotic.

the music streaming revolution. Ever since Spotify, Amazon Music, YouTube Music came into the fore a few decades ago, there have been all these schemes to just upload a song that just lasts 30 seconds. And it doesn't even have to be a song. It can be absolute gibberish. It just needs to be a little bit of audio in order to get those royalty payments. Now, like many other musicians, Smith allegedly

when he was concocting this theme, first tried to just upload his own music. And he realized that there were such meager payouts by streaming companies, which has been a complaint by many musicians regarding Spotify and these other streaming music services. And then he was like, well, OK, well, I'm not making any money streaming music. I can't go on tour like the biggest artists, which is how they make their money now. So why don't I just concoct allegedly this

insane scheme, this crazy flywheel where you have bots listening to bot produce music. And when you get enough streams of this over time, that can add up. And eventually this guy allegedly pocketed $10 million. One of the big limiting factors to this operation was just the sheer amount of accounts he needed to create to not

arise suspicion because one of the ways that streaming companies can get you is that if you stream the same song over and over and over again, that looks suspicious. So what he did was spread it across

10,000 different streaming accounts. So each song would get just a few listens here and there, but none would really stand out. And that became such an issue that he started hiring people to just create those email addresses. And he started buying them from online because he's literally had to create 10,000 plus new email accounts. According to the financial breakdown that he was emailing himself back and forth throughout the years, he

He was making some money. He calculated if he could stream his songs over 660,000 times per day, he could bring in daily royalty payments of about...

$3,300, which comes out to $1.2 million a year. This scheme was making some bank, but you will say that he's stealing it probably from artists who were actually publishing their music and deserve those streams more than him, which is why the district attorney office is going after Smith. Right. There is an outcry from artists right now about AI created music sort of spamming these streaming services while they don't get that much of a payout. I mean, what?

How much does Spotify actually pay out to musicians? They keep it under wraps, but there are sort of ways to calculate this. And the average stream, so say someone streams your song, you will get anywhere from 0.3 cents to 0.4 cents. And that amounts to $3,000 to $4,000 in royalties for one million streams. And for musicians that have

sort of absorb this streaming revolution where you're not selling physical copies of your music anymore and you have to put all your songs on Spotify. That is not a lot of money and you can't rely on that for your income. Instead, you're seeing all of these artists go on tour and that is the major source of their revenue now. And they've sort of called into, they've warned about the rise of AI music and podcasting

bots and schemes like this taking over streaming services and siphoning royalties away from them. But I got to say, the public response to what this guy did was generally more, hey, I'm impressed. This is crazy that you devised this scheme to manage to evade all these fraud filters. And it was crazy.

quite ingenious and they were like, maybe we shouldn't, you know, prosecute this guy and instead get it, you know, go full catch me if you can get them on our side, figure out how to stop a lot of these other things that are going on because I mean, they caught this one guy doing it, uh, but we don't know how many, uh,

other similar schemes are happening right now. I'm going to open up Spotify and listen to, what is it, Zygote? Zygote's a banger. Yeah, such a good song. Okay, like the leaves every autumn, inflation keeps on falling. The Consumer Price Index report yesterday showed that consumer prices eased to a three-year low, with inflation dropping for a fifth straight month.

Consumer prices in August climbed just 2.5% from last year, a decrease from 2.9% inflation in July. Price growth for food slowed, while energy and used vehicles were all cheaper than a month earlier. It was a report card that your mom would proudly put on the refrigerator.

but it wasn't an A+. Core inflation, which removes volatile goods like energy and food, grew at a 3.2% annual pace, the same as a month before and higher than expectations. The boogeyman, as it has been for the last couple of years, was housing costs. Shelter accounted for more than 70% of the year-over-year increase in core prices, showing how elevated home prices are continuing to prop up broader inflation numbers.

What does this mean for the Federal Reserve? Well, as you know, the Fed is expected to cut interest rates for the first time in four years next week. And this report does nothing to change that. Inflation is still coming down and the Fed has pivoted to focusing on the labor market instead of surging prices because they're just not surging anymore. Toby Jerome Powell will never declare victory over inflation, but this is like a football game where you're up big and just taking a knee to run out the clock. I think it also just shows how quickly has inflation

inflation has kind of faded from being the number one priority. I mean, it's not even our top story on the show today. And it's also, we used to sit with bated breath as these inflation reports would drop because we wanted to see that it was coming down. Now, all the attention has kind of shifted over to the labor market and how strong that is, which is a good thing. Like we shouldn't be hanging on every last inflation report like this. We are still not quite to that 2% number that Jerome Powell feels comfortable at.

But yeah, I guess you could say that the bad news is that that core CPI number is just a little bit more stubborn than expected. But I mean, housing costs are always going to remain a little bit of an issue. But those food and energy prices, people are probably feeling that and feeling a little bit better that, you know, energy costs slid 0.8 percent. Gasoline prices got lower, as we've talked about on this show. But it is just interesting to take a step back.

even to a few months ago when this was just the main thing that we wanted to talk about. And now it's a little less. So yeah, when you go to the grocery store, you're not going to be super shocked to see prices, you know, doubling over the past year as they had been over the past couple of years. I mean, food price gains continued to slow down. Food prices climbed 0.1% over the month. So basically not at all. Grocery prices were completely flat. Uh,

after they rose 0.1% from the month before veggies and fruits prices fell 0.2%. Now there is one little issue at the grocery store and you may notice this when you go into the egg aisle. There's no such thing as an egg aisle, whatever, wherever, wherever, wherever that egg section is. Remember egg prices skyrocketed at

the beginning of last year due to avian flu. They fell back down, but now they are coming back up. Egg prices in August rose 4.8% from the month before. And then in July, the month before that, they rose 5.5%. And compared with a year ago, egg prices are up 28.1%. So while all grocery prices are either staying flat or falling, it seems like egg prices are

are on their way back up. Which is tough because we eat a lot of eggs, at least in our household. One thing to look at too as well, another piece of government data that dropped this week from the Census Bureau was household incomes. And they actually rose last year for the first time since the pandemic began. Inflation adjusted. Median household income reached $80,000 in 2023. That's up from $77,000 in 2022. It

Remember, though, to put this in perspective, we're only just now getting back to the peak median income of 2019 after this pretty long blip, pretty long interruption from the pandemic. So our household income is recovering, but it's only recovering back to those pre-pandemic levels. And it is adjusted for inflation. So that's why those income numbers had been going down for the past four years. Now we're back to 2019 levels as inflation has eased.

There's this famous scene from the social network where Justin Timberlake's character tells Mark Zuckerberg to drop the the and just call it Facebook. While another company is also interested in slimming its name down, Campbell's Soup is dropping the Campbell's and is now just Facebook.

Soup. Just kidding. It is dropping soup from its name to become the Campbell's Company to signify its shift from just a chunky noodle purveyor to a broader packaged food company. Campbell's has spread its wings beyond French onion and broccoli cheddar recently. It also owns Goldfish, V8, and jarred sauces brands like Prego and more recently Rayo's, which it purchased for $2.7 billion last year. Neal, Campbell's is synonymous with soups because it's

It was the first brand to ever sell canned soup more than a century ago. But now almost half of Campbell's revenue comes from its snack sales, not its soup division. So it clearly wants to show that it's more than just a creamy tomato and a nice cream of mushroom. I need to start a company that's just soup, Inc. No, the quotes from the CEO about this name change are.

It's just so funny when just the word soup. I don't know. He goes, we will always love soup and we will never take our eye off this critical business. But today we're so much more than soup. He went on to say the new name still celebrates soup. It respects our heritage, but also reflects who we are today and who Campbell's is today is.

A soup business, yes, but more broadly, a snack business. And that snack business has been growing much faster than the soup business last year. Its snack sales grew 13% while its soups grew 3%. And that tracks broader consumer trends. Nearly half of Americans say they eat at least three snacks a day. And Campbell is just bulking up on the pantry and deciding this is our future. Soup sales will continue to stay, grow at a steady clip.

maybe won't grow so much, but we're banking our future on snacks. They are actually. One bull case for soup is that the population is aging. We've talked about the silver tsunami, and on average, older people eat more soup. So that's something to, if you're bullish on soup or you don't want soup to go out of style, that's something that could propel that forward. I'm bullish on soup. Yeah. I remember I actually revisited an article that I wrote back

in 2020 when the pandemic was in their early stages where soup sales just went through the roof. Soup demand was up 140% at the beginning of the pandemic as no one really knew what was going on. So everyone started stocking up on that. And then as we...

actually exited those first few months and entered in the summer, it still was on the rise, 35% boom. So that was a nice trip down memory lane, but Campbell's is a lot more than soup at this point. I mean, it's got Pepperidge Farms, which makes Milanos and Goldfish. It's got Rayos, which it bought via that deal with Sovos Brands. It's got Kettle Brand, which is the

are those Kettle Chips, Cape Cod as well. So it is just a broader CBDG consumer packaged goods company at this point trying to snag a bigger piece of that $200 billion snack industry that we've seen a lot of other mergers and acquisitions happen. I mean, Mars bought Kelanova for $29 billion last month. So we're seeing a little bit of a snack arms race, and the Campbell's company wants to stake its place. Kelanova makes Pringles and Cheez-Its, but...

Campbell's has this ace in their pocket, which is Goldfish. What the heck? Goldfish is massive. Goldfish is a billion dollar business already. Goldfish, people buy a billion dollars worth of Goldfish every single year. And by 2027, Campbell's expects it to be the biggest brand in its entire portfolio. I just thought of a nice little dish of maybe get some Campbell's soup, a tomato soup, crumble some Goldfish on top as like your crackers. I think you were onto something there.

Up next, the one, the only, the Neal's Numbers.

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Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will absolutely level up your small talk game today. My first number is from a new study that revealed how the brains of teenagers aged far more than expected during pandemic lockdowns. And most crucially, girls' brains age much faster than boys'.

boys. According to research from the University of Washington published this week, scans of adolescent brains in 2021 showed that girls' brains had accelerated 4.2 years ahead of what was expected. One of the study's authors, Patricia Kull, explained that a girl who came in at 11 and then returned to the lab at age 14 now has a brain that looks like an 18-year-old's following the pandemic.

Boys' brains, on the other hand, accelerated just 1.4 years, which Cole called a stunning difference with what was observed in girls. Brain aging refers to the thinning of the cerebral cortex, the outer layer of tissue that controls higher-level functions like decision-making and reasoning.

It is normal for the cortex to thin as you get older and mature. This allows the brains to develop specialization. But the researchers warn that the social isolation teens encountered during the pandemic could have contributed to accelerated aging with potentially harmful cognitive impacts down the road.

Toby, this wasn't the first study to show that isolation during COVID may have played a role in faster brain aging, but it was the first to show the stark difference between boys and girls. And the study was almost an accident because they were studying these teenagers' brains before the pandemic, and then the pandemic happened, so they couldn't actually follow up with them until after it became safe to kind of bring them back in for an MRI, which is then they saw and came to these conclusions about how much these brains were aging

were aging and that the difference between boys and girls brains was interesting as well they said maybe just something to do with how girls socialize with how boys socialize maybe less being able to talk with your friends cause girls to experience more of that stress which caused their brains to

age a little bit faster. But yeah, the study did have its limitations as well because they said we couldn't really control for things like familial financial security or food safety or exercise or sleep. So they're saying take it with a little bit of a grain of salt. It's also unknown if the participants having COVID-19 actually impacted the study as well. But very curious and interesting to see how much the

those few years really can impact a teen's development. Okay, you might want to skip this second number if you're afraid of heights. It's 755 miles above the Earth's surface, which is how high the crew of the Polaris Dawn mission ventured on Tuesday. That's further than any human has traveled into space since an Apollo mission in 1972, and all the more historic because it is a

private crew, not a government, pushing the boundaries of the final frontier. Polaris Dawn is the brainchild of Jared Isaacman, a fintech billionaire and truly adventurous soul who partnered with SpaceX to take himself and three other non-professional astronauts deep, deep, deep, deep into space. This morning, after coming down to an altitude of about 450 miles, they'll attempt the first ever spacewalk by civilians, which

Experts warn is pretty dang risky. It's actually happening as we speak right now. For two hours, the astronauts will be exposed to the vacuum of space while Isaac Mann and another crew member will head outside the vehicle 20 minutes at a time to test out SpaceX's brand new spacesuits. Here's a bonus on that altitude milestone. Sarah Gillis and Anna Manon, the two women on the mission, have now gone further from Earth than any other women ever because all the moon missions were made up of guys.

I don't want to up your number with a number of my own, but a new record has also been set this morning as the most people in Earth orbit at one time. It's at 19, and that is including the nine people on the International Space Station, including the two astronauts stranded by the Boeing Starliner, three people en route to the ISS, three on a Chinese permanent station, and then the four flying on this Polaris Dawn mission. The funny part, too, is that without the

the two astronauts stranded by Boeing Starliner, they would not have set this record. So shout out Boeing. You did something well and contributed to space history. For my final number, remember Ray Gunn, the Australian breaker who went viral during the Olympics for her

unorthodox moves that earned her last place in the competition? Well, she is now the number one breaker in the world in the World Dance Sport Federation rankings. This is not a joke. It's real. Ray Gunn, a college lecturer in Sydney whose real name is Rachel Gunn, is the top breaker in the world despite losing her three dance-offs at the Olympics by a combined score of 54-0.

How did this happen? Well, according to the World Dance Sport Federation's rulebook, the standings are based on four competitions that occur in the last 12 months. In that period, Ray Gunn did win an event, the Oceania Continental Championships, which featured breakers from Australia and New Zealand. But besides that, there weren't many breaking contests at all because of the Olympics and Olympics qualifiers, which don't count toward the world rankings.

As news of Ray Gunn's number one ranking dripped out, pressure built on the World Dance Sport Federation, which already had a credibility problem, to explain themselves. They issued a statement saying the world rankings as they currently stand should be interpreted in conjunction with results from recent global breaking competitions for a more accurate reflection of the global competitive landscape. TLDR, don't take this seriously.

Oh, B-Girl Ray Gunn. It's been a minute. I haven't thought of you, but I wish I had because she is just truly one of the most polarizing and recognizable figures from this Olympic cycle. I was reading some of the comments on the Wall Street Journal article that wrote about her status as the world number one, and these two were back to back. One said, a slap in the face to those with real skill and athleticism in the sport, but then another said,

immediately after that someone said I love Ray Gunn she makes me laugh and laughing makes me feel good and that to me shows the dichotomy of the two parties of how you can interpret Ray Gunn you could say like hey she brought a lot of joy to a lot of people she maybe elevated the sport maybe not in the best light but then the other camp is saying like she doesn't deserve any of this attention she did not

put forth the sport of breaking in a good light at the Olympics on the biggest stage. But I don't know. I fall in the latter cap. She does bring me joy. Every time I see her doing that kangaroo move, I let out a little chuckle. Michael Jordan has achieved a lot in his life. Hall of Famer, billionaire shoe baron, and the second best player to ever play the game. But he hasn't achieved something that you or a neighbor has probably done at least once in your life. Sell a house.

Jordan's mansion in the Chicago suburb of Highland Park has been on the market for 12 years now. He first listed it for $29 million all the way back in 2012, but it's slowly been reduced through the years and you can now get it for the bargain bin price of just under 15 million bucks.

Now, you can blame everything from it being overpriced for the area to its non-waterfront location for its inability to sell. But the real reason it's languished on the market for so long is MJ's house has a little too much MJ in it. Seriously, he's everywhere. The Iron Gate is adorned with his number 23. He plastered his Jumpman logo on flags and walls. And the basketball court literally has his name on it. Neil, apparently this is a thing, though. Ultra-customized celebrity houses are...

are very tough to get off the market. Yeah, I mean, if you look at Derek Jeter, he had a New York Lake home that had turrets and a Statue of Liberty replica. That took six years and almost $10 million in discounts to sell, which it did this summer for just $5.1 million. Slash, the musician has an

L.A. home with a stripper pole and skull sconces, and that sat on the market for two years. And then Joe Pesci has this Jersey Shore house that looks like it's ripped straight out of Goodfellas that he also has been struggling to sell. So when you look at Michael Jordan's house and it's so Jordan-esque, people don't want to live in another person's house. And you're seeing this. It's even he's so obsessed with the number 23 that

The price he lowered it to in 2015, you said just under $15 million. Well, it's actually $14.855 million. And those digits add up to the number 23. So the number 23, the Jordan legacy and his brand are just infused throughout the heist

the house and his sale process that it just made this absolutely impossible to sell. Another reason why it's languished on the market for so long, too, is it's become a tourist attraction at this point because everyone knows it's Michael Jordan's mansion because, again, it's got a giant 23 on the gate. So people are curious. It's not exactly hard to spot. So if you are

considering buying this house. You don't really want people driving by and saying like, oh, that's the old Jordan mansion right there. But some people have come forth and say like, let's turn it into a Michael Jordan museum at this point. Unfortunately, there's zoning laws that make it really difficult. There's nowhere to really park for that. So it is just going to continue sitting there until someone decides

kind of has the guts to say, you know what? I am going to buy Jordan's mansion. But yeah, would you ever put in a bid for a house like this? No, absolutely not. I don't want to live in Michael Jordan's house. But here's what I would do if I were them. I would put it up on Airbnb. Oh.

Oh, yeah. Say like grab your buddies for a bachelor party. Come to stay at Michael Jordan's house. There's a basketball court. There's a poker room. There's a movie theater. There's an outdoor tennis court. Seems like it would be great for a weekend to say. And it'd be great marketing to say like, hey, come and live in Michael Jordan's actual house. The problem is this is just kind of like a sleepy suburb and you're not even on Lake Michigan. You're two miles away, which is another reason why they're having to why they're struggling to sell this house.

But I think that might be the move. Just like put it up for $2,000 a night on Airbnb. Invite 20 dudes who love Michael Jordan to come to come there. And, you know, maybe I would consider that. That is a good idea. If anyone's got a direct line to Jordan, get him on the phone with Neil because I think he's got a little business proposal for him. OK, let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful Thursday for any feedback, questions or questions.

comments on the show, send an email to morningbrewdaily at morningbrew.com. And don't hesitate to share Morning Brew Daily with your friends, family, or coworkers so you don't have to explain why the thinning of the cerebral cortex matters. If you need some inspo, Toby is here to help.

I want you to share it with someone in your run club. I know there are lots of you out there rocking those three-inch inseam shorts and running around with your pals, so spread the good word as you are putting in the miles. I can't talk past zone three, so keep it zone two. Then you can talk and say, hey, there's a really cool podcast you should check out.

Okay, let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Uchenoba Ogu is our technical director. Billy Menino is on audio. Hair and Makeup is the new number one in the Hair and Makeup World rankings. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.