> I don't understand why a label wouldn't like this model...
It’s pretty obvious, isn’t it? They’d make less money and
they have a lot of leverage over Spotify to force it to accept pretty much whatever terms that benefits the big labels at the expense of indies.
Interestingly this gives rise to a business opportunity for indies. Create an indie-only music service that doesn't include the big labels, and encourage indie lovers to use it on the basis that artists get more of their money that way. They should still be able to manage viable margins since they don't have to sink disprortionate royalties to the big labels.
They make less money, the size of the pot used to disburse royalties to them becomes capped at the max amount paid by subscribers listening to their artists instead of the whole revenue coming from subscriptions.
I don't get your reasoning but I also don't think your conclusion holds.
A simple solution is just a saner redistribution of the money paid by users according to their listening habits. Isn't that what you've proposed?
Assume that currently:
Alice listens 1 hour/month to Ed Sheeran
Bob listens 730 hours/month to BobTunes
and they both pay $10 a month. Spotify gets its percentage, say 10%, then $18 gets redistributed as $17.99 to BobTunes's label and $0.01 to Ed Sheeran's label.
Solution:
Both Alice's $9 and Bob's $9 should get redistributed according to what they individually listen. In this simple example they both listen only 1 artist so both of their $9 go to Ed Sheeran's label and BobTune's label.
I think this is a simple solution against bots (or rather, the current distribution type has a serious flaw), and I don't see why wouldn't labels want this.
I haven't proposed anything, I just stated why the fairer distribution of listening time from subscriptions doesn't exist: the major labels will lose money they get from having a split pot from all subscriptions.
Your example makes it perfectly clear, even though BobTunes has 730 hours/month in this example from Bob, in the aggregate of all users listening time their share % of total listening time will be much lower than the total listening time of Ed Sheeran; Ed Sheeran will have millions of people maybe listening a few minutes/an hour while BobTunes might have low thousands, you'd need every BobTunes listener to stream orders of magnitude more time to compensate.
In the current scheme, having major artists with a broad audience listening a little gets a share of the pot that every subscriber funds, for the labels this is great, they make money from the total pot even from non-listeners of their artists, smaller artists from indie labels get a smaller share of the total pot even if they have mega-fans that only listen to them.
That's exactly why the system you describe doesn't exist, the major labels would lose money since they won't collect a share of the pot from subscribers who aren't interested in their artists (like me, for example).
Makes me wonder if the big players aren't bot-farming too... Perhaps to get to the top of 'most played' rankings...