
How would user-centric payouts affect the music-streaming world? - anotherevan
https://musically.com/2018/03/02/user-centric-licensing-really-affect-streaming-payouts/
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rcthompson
For anyone who is confused about what the difference is (like I was
initially), consider the most extreme case for the "user-centric" model:
suppose I subscribe to a streaming service, paying $10 a month. If I only
listen to a single artist for that entire month, then my entire $10 (minus the
service's own cut) goes to that artist, regardless of that artist's fraction
of the total songs streamed that month by all users.

~~~
MapleWalnut
I think Youtube Red does something like this.

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Technetium_Hat
YouTube red distributes money according to watch time per month.

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paulgb
Does anyone else find it counter-intuitive that indie labels would benefit
here?

The way I'm thinking about it is, a band stands to gain if their listeners
generally listen to _less_ (total) songs than the average user, but stands to
lose if their listeners listen to _more_ songs than the average user. My
thought is that listeners who listen to more music are more likely to develop
a taste for the longer tail (desire for variety and possibility for exposure.)
From the studies they cite, though, it sounds like the opposite happens.

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b_tterc_p
You might be right, but I think wrong. I would assume that people with non
discerning tastes would be more prone to clicking whatever popular playlist is
thrown at them while people with preferences would. People with specific
tastes would probably fall into grooves of specific groups for distinct
periods of time. I know most of my music streaming is playing specific groups.
But that is of course just anecdata

~~~
sethhochberg
In the more nice corners of the music world - especially dance, jazz, and
classical - it is very common for music fans to describe their tastes by
following a specific label. A good label head is a tastemaker and curator, and
their label brand will all be a consistent kind of sound (or level of quality,
for classical).

When you find a DJ you like, you figure out what label they're signed with,
and if the label head has done their job right you've just discovered a whole
family of related similar artists who produce music in the same style and
often tour/perform together.

This doesn't really happen as much in other genres, where the goal is to be
signed with a sub-imprint from Sony, Universal, etc... there isn't nearly as
much curation going on.

~~~
sethhochberg
Its too late for me to edit this comment but FWIW I intended to write about
"niche corners", not "nice corners" \- hopefully it seems a little less
elitist with that context :)

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trixie_
I hate how most of the money I pay Spotify goes to artists that I never listen
to.

A niche band that I love broke up for financial reasons, and I was of no help.

Businesses that use Spotify to blast the top-40 all day are watering down the
revenue for everyone else.

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jlarcombe
Buy their records on Bandcamp instead. It's that simple.

~~~
trixie_
Me buying the record would help, but it's not enough. The payment model needs
to change.

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aston
Here's the simplest way to understand where your money goes (assuming you're a
subscriber, otherwise where the ad revenue earned on your eyeballs goes): For
each song you stream, that artist gets a fixed fraction of a cent. Unless you
listen to an atypically large number of hours of music each month, there will
be leftover money. That remaining money goes into a pot allocated across every
artist on the streaming service in proportion to their total number of
streams.

So, roughly, the policy as it stands pays the biggest artists—or, really, the
labels of the biggest artists—more money. Those big artists and labels are
powerful enough that the chance such a change will be made is basically nil.

The reality is a little more complicated because the fixed per-stream rate is
set based on the total number of streams, but to a first order approximation
this is it.

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tunesmith
Are there currently any services that stream user-centric as the article
describes? I'd put my music on it, since I have a very small number of very
loyal listeners.

I remember hearing about a startup (musician-owned?) that was trying to launch
that kind of service, but I don't remember the details. I love the idea as a
non-profit, almost like a musical "utility" service.

~~~
sithadmin
Crunchyroll (probably the largest and most visible Anime streaming service)
does, see: [https://www.otakujournalist.com/where-your-crunchyroll-
dolla...](https://www.otakujournalist.com/where-your-crunchyroll-dollars-
really-go-an-interview-with-the-ceo/)

~~~
mortenjorck
Wow, that’s really great to read. I don’t watch a huge volume of anime, but
it’s heartening to see that in a month where the only thing I watch is a niche
career-drama slice-of-life show, that studio really is getting a proportionate
amount of my subscription dollars.

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shams93
Pro rata is how indie artists get 700 hours of listeners in a year with $0
income from Spotify. Unless you reach a certain threshold the big artists get
to walk with the income generated by your hours. Most likely this happens to
the vast majority of indie artists on Spotify.

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pjc50
I've always been confused about whether this actually makes a difference, or
whether its just arithmetic associativity working.

foreach artist: foreach user, count number of songs of artist X listened to by
user

vs

foreach user: foreach artist, count number of songs of artist X listened to by
user

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georgn
Related from a few years back: [https://medium.com/cuepoint/how-to-make-
streaming-royalties-...](https://medium.com/cuepoint/how-to-make-streaming-
royalties-fair-er-8b38cd862f66)

~~~
barbecue_sauce
This article doesn't seem to mention ads at all. I have been using Spotify for
at least 6 years now, and have never paid for it.

~~~
longerthoughts
Good point. Maybe ad revenue from your sessions goes into the pro rata pool
somehow?

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nixpulvis
Can we talk about how we (the listeners) don't own our music anymore, and are
at the mercy of the cloud to provide us our precious songs. Apple Music has a
nasty habit of deleting my music without warning. This can't be a sustainable
long view for us. All this hubbub about what service based model is correct is
missing the real issue in my opinion, though that's not to say getting my
money to the actual artists isn't important. We need something more different.

~~~
NoPicklez
You pay for a streaming service, you don't pay for specific songs or artists.

I have been using Spotify since 2011 and have never once had an issue with
music being deleted from Spotify or my device.

Perhaps I'm missing something here but it's not really an issue. You are at
the mercy of the cloud, but for great benefit over having to purchase each
individual track for $1.99 from iTunes. Where you could argue that you had a
level of "ownership" over the track because you could export it anywhere.

What is your alternative?

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haywirez
This debate has been going on in music biz circles for at least 5 years or
more[0], with zero results. I've also heard the comical excuse of calculating
the proceeds this way as being "too difficult" in terms of data processing...

0: [https://medium.com/cuepoint/how-to-make-streaming-
royalties-...](https://medium.com/cuepoint/how-to-make-streaming-royalties-
fair-er-8b38cd862f66)

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ajsharp
If either service really cared about musicians' well-being, they'd let their
customers subscribe to artists directly, contributing a set amount that goes
straight to artists, minus txn fees. In other words, what Patreon does, but
intermediating in a way that makes it less awkward for artists, so they don't
feel like they have to a.) beg for money b.) become content creators.

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oh_sigh
It only seems fair that, if I pay a fixed amount for an on-demand service,
that the artists I actually stream are the ones that actually get paid.

If I pay $10/month, only listen to the Obscure Flooters, why would Taylor
Swift get a lot of my money, and Obscure Flooters get basically 0?

~~~
baroffoos
Vulfpeck attempted to game the system by creating an album of silent music and
asked their listeners to play it on repeat while sleeping

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ucaetano
The problem is that not all songs are equal. People don't care about all
artists equally, and therefore the "value" of a stream is different if you're
listening to a song from, say, Taylor Swift, compared to a song from an
unknown artist that gets about 10 streams per month.

Another way to think about it is the value at risk for the streaming company
of an artist being dropped from the service. Nobody (or close to it) will stop
subscribing to Spotify if a random, unknown artist who only gets a few streams
leaves the service. But if you had a few major artists drop the service, you'd
see a drop in value much bigger than their share (in streams) of the revenue.

Just as you don't expect a Van Gogh to cost the same as my kindergarten
painting, or Jeff Dean to be paid the same as someone just out of college, you
wouldn't expect a stream from Taylor Swift to be paid the same as that of a
random unknown tuba player.

~~~
p1necone
I pay for Spotify because _everything_ I want to listen to pretty much seems
to be on it. If many of the small artists with only a few streams per month
left I would probably unsubscribe.

Sure millions of people listen to Taylor Swift, but millions of people in
aggregate also listen to Folk Punk, or Indie Country, or their own small local
artists on the service too.

I like Spotify because I can go and listen to the latest single by the Foo
Fighters or whatever, and the next moment on a whim I'll search up this gem:
[https://open.spotify.com/album/2JDWZnVNQ2RpUWUF5XNkcX?si=YuJ...](https://open.spotify.com/album/2JDWZnVNQ2RpUWUF5XNkcX?si=YuJMV77PQpughebXkue24w)
and lo and behold it's there too. (warning: album title is a bit nsfw)

~~~
longerthoughts
The parent isn't saying that the service doesn't need artists with fewer
streams, just that the service takes a bigger hit from losing big names than
it does from losing small ones. More people are likely to leave the service
from Spotify losing Taylor Swift than from losing a budding Noise artist with
3 followers.

~~~
mynegation
Funny thing, I subscribed to Spotify _because_ it was at the time Taylor
Swift-free zone. (I like her as a person though).

~~~
ucaetano
Sure, but you're one in many millions, the vast majority of users have the
exact opposite behavior.

~~~
p1necone
Do they? Lots more people listen to Taylor Swift than they do any single given
"niche" artist, but there's also a lot more niche artists than there are
Taylor Swifts (or equivalent).

~~~
ucaetano
Indeed, but artists are not the source of revenue, users are.

There could be a billion small artists, if nobody (or almost nobody) listens
to them, they are irrelevant.

~~~
p1necone
You still seem to be completely missing my point, I don't know how I could
explain it more clearly to you.

~~~
ucaetano
Likewise.

