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They put all the streams in one pool and then split from there. Popular artists get almost all of it. When you spend $10 or whatever on streaming, you'd expect

They put all the streams in one pool and then split from there. Popular artists get almost all of it. When you spend $10 or whatever on streaming, you'd expect $7 to be split between the artists you listen to, but it's not. Instead almost all of it goes to the big artists anyway because in the big streams pool the small artists you listen to have a tiny proportion of listens, even if you exclusively listened to them. This gets worse when you consider all those shops/cafes/etc with Spotify's top charts playing on repeat. They may be a small percentage of users, but they're an outsized proportion of streams, and almost exclusively big artists. This is the way it is because big artists have big name labels, and those labels are the only ones who can negotiate, so the deal ends up favoring the big artists/labels. This is definitely not how most consumers would expect it to all work, and therefore "unfair" seems like a reasonable term to use.

cwillu 3y ago
This is something twitch-style subscriptions get largely right.
hackideiomat 3y ago
Tidal (spotify competitor) takes 2 euro and gives 'em to the artist you've listened to the most. But the rest of the money is probably all going to the big ones as you explained. Just saying this because it is so weird. Like, hell yeah I sure hope my money goes to the people that I listen to why is this a thing??
- danpalmer 3y ago
  > and gives 'em to the artist you've listened to the most This seems like a way to sound popular without actually solving the problem. IT sounds like it would help "yay my favourite artist gets lots of money!" but when you model it out I'd expect quite similar outcomes – most of your money is still distributed in the way Spotify do, and often your top artist might still be one of the popular ones, and small artists aren't going to be the top of many people's listening.
oneplane 3y ago
> you'd expect I don't. I expect that when I pay for a streaming service, as soon as the money is in their account all bets are off and no insight is given. So such a generalisation of what people expect doesn't hold up for consumer products I'd say. I wouldn't be surprised if most customers don't even think about it at all.
Kim_Bruning 3y ago
What am I missing? You'd think it should still be fair because money is supposed to be fungible. So if Artist 1 gets 99% plays, and artist 2 gets 1% plays, then if you split the 70% of revenue at end of month by 99/1 , that should be fair, right? I'm probably missing something important. Is there a source for the actual formula or so?
- dagw 3y ago
  If I listen to 10 songs in a month all by artist 2 and you listen to 1000 songs by artist 1, should my subscription money all go to artist 2 or should it 'subsidise' your listening to artist 1. That is the core question. Basically do you put all the money in a pot and then split it, or do you treat each subscriber as a unit and split their subscription fee just among the music they listen to.
- scbrg 3y ago
  Users U1 and U2 have a the same subscription, and $10 of the fee they pay will be distributed to artists. User U1 listens to tracks from artist A1 ten times. User U2 listens to tracks from artist A2 190 times. The $20 that U1 and U2 have paid are distributed to artists according to number of songs streamed. Artist A1 gets $1, and artist A2 gets $19. It's counter intuitive that U1 effectively pays $9 to A2, without having listened to their songs even once.
  - JCharante 3y ago
    Meanwhile U2-U99999 pay money towards A1 without having listened to them
    - scbrg 3y ago
      I tried to pick a simple scenario to make it easy to see the faulty model, and assume that this version of Spotify has exactly two users and a catalog of exactly two artists. The imbalance remains even if you scale it up. Artists that are listened to by users that listen to less than the average number of streams are underpaid in relation to the revenue they generate for Spotify.
Denvercoder9 3y ago
The "pool all streams" model doesn't necessarily favor big artists, it favors artists that are listened to by people that stream a lot of music. For example, consider a bimodal population of 1000 people that listen 10 times to a popular artist (for a total of 10,000 streams) and 10 people that listen 1000 times to a small artist (for an identical total of 10,000 streams). In the "pool all streams" model, both artists get paid the same, while in a "split per user" model, the popular artist gets 100x the payout of the small artist. An interesting question then is whether big or small artists are disproportionaly listened to by people that stream a lot. I haven't seen any data on it, but intuitively it wouldn't surprise me if it's the latter case.
- danpalmer 3y ago
  You're right that it also favours artists that are listened to by people that stream a lot of music, but it does favour big artists too. Big artists can make up their numbers by lots of streams from few users, few streams from lots of users, or both. Small artists tend to get a lot of streams from very few users, and lose out, so this suggests that earnings are more correlated to unique listeners than to average listens per user.
  - Denvercoder9 3y ago
    If with lose out you mean that it's not financially sustainable for them, then it's not at all clear to me that's caused by the way Spotify splits revenue, instead of Spotify just being too cheap for users to make streaming viable. Spotify takes in less than five bucks per Premium user per month, so after subtracting costs you need to quite a bit of listeners to make a living, even if Spotify shares it payout per user. If with lose out you mean that Spotify pays out less per stream to small artists as opposed to big artists, then that's not the claim made in the parent comment nor one I've been able to find any evidence for.
    - danpalmer 3y ago
      My understanding is that the amount of money spent on music by consumers has dramatically increased in the streaming age. It's not clear to me that Spotify only passing on ~half after fees is any different to a CD bought in a shop that pays rent and needs manufacturing, physical distribution, etc. I'm fairly sure this is not about Spotify being too cheap, it's that the revenue distribution skewed in the transition from CDs to streaming in favour of popular artists.
circlefavshape 3y ago
> They put all the streams in one pool and then split from there. Popular artists get almost all of it. ... but that's because popular artists account for almost all the streams, right? I don't think a per-user split is any fairer, it's just different, and there's no clear evidence on whether there'd be less of a gap between big and small artists with a user-centric split.
bad_user 3y ago
> "They put all the streams in one pool and then split from there. Popular artists get almost all of it." Like they should, mostly because they drive Spotify subscriptions. It's fair because there is a strong correlation between popularity and work, coupled with talent. > When you spend $10 or whatever on streaming, you'd expect $7 to be split between the artists you listen to, but it's not. Even if they'd distribute your subscription to your favorite artists, the total revenue for those artists and their share would still be mostly the same. Only in some degenerate scenarios, where you listen to only one obscure artist that nobody listens to, would those numbers be any different, and not by much. > This is the way it is because big artists have big name labels. Economies of scale probably apply. Like they should. ;-) Talented artists can often sign with big labels. And isn't it wonderful that in 2023 you can publish your work, on Spotify and elsewhere, without having to sign with a big label?
- ClumsyPilot 3y ago
  > they drive Spotify subscriptions There is no reason to believe this is true - I can download all the main artists in 30 minutes. Its the niche ones that I enjoy discpvering and wouldnt bother to download > there is a strong correlation between popularity and work, coupled with talent. Even stronger correlation between marketing spending and popularity > Only in some degenerate scenarios, where you listen to only one obscure artist that nobody listens to, This is waay too disrespectfull
  - thegiogi 3y ago
    I think he’s using degenerate in the mathematical sense.

cwillu 3y ago

This is something twitch-style subscriptions get largely right.

hackideiomat 3y ago

Tidal (spotify competitor) takes 2 euro and gives 'em to the artist you've listened to the most. But the rest of the money is probably all going to the big ones as you explained. Just saying this because it is so weird. Like, hell yeah I sure hope my money goes to the people that I listen to why is this a thing??

danpalmer 3y ago
> and gives 'em to the artist you've listened to the most This seems like a way to sound popular without actually solving the problem. IT sounds like it would help "yay my favourite artist gets lots of money!" but when you model it out I'd expect quite similar outcomes – most of your money is still distributed in the way Spotify do, and often your top artist might still be one of the popular ones, and small artists aren't going to be the top of many people's listening.

oneplane 3y ago

> you'd expect I don't. I expect that when I pay for a streaming service, as soon as the money is in their account all bets are off and no insight is given. So such a generalisation of what people expect doesn't hold up for consumer products I'd say. I wouldn't be surprised if most customers don't even think about it at all.

Kim_Bruning 3y ago

What am I missing? You'd think it should still be fair because money is supposed to be fungible. So if Artist 1 gets 99% plays, and artist 2 gets 1% plays, then if you split the 70% of revenue at end of month by 99/1 , that should be fair, right? I'm probably missing something important. Is there a source for the actual formula or so?

dagw 3y ago
If I listen to 10 songs in a month all by artist 2 and you listen to 1000 songs by artist 1, should my subscription money all go to artist 2 or should it 'subsidise' your listening to artist 1. That is the core question. Basically do you put all the money in a pot and then split it, or do you treat each subscriber as a unit and split their subscription fee just among the music they listen to.
scbrg 3y ago
Users U1 and U2 have a the same subscription, and $10 of the fee they pay will be distributed to artists. User U1 listens to tracks from artist A1 ten times. User U2 listens to tracks from artist A2 190 times. The $20 that U1 and U2 have paid are distributed to artists according to number of songs streamed. Artist A1 gets $1, and artist A2 gets $19. It's counter intuitive that U1 effectively pays $9 to A2, without having listened to their songs even once.
- JCharante 3y ago
  Meanwhile U2-U99999 pay money towards A1 without having listened to them
  - scbrg 3y ago
    I tried to pick a simple scenario to make it easy to see the faulty model, and assume that this version of Spotify has exactly two users and a catalog of exactly two artists. The imbalance remains even if you scale it up. Artists that are listened to by users that listen to less than the average number of streams are underpaid in relation to the revenue they generate for Spotify.

Denvercoder9 3y ago

The "pool all streams" model doesn't necessarily favor big artists, it favors artists that are listened to by people that stream a lot of music. For example, consider a bimodal population of 1000 people that listen 10 times to a popular artist (for a total of 10,000 streams) and 10 people that listen 1000 times to a small artist (for an identical total of 10,000 streams). In the "pool all streams" model, both artists get paid the same, while in a "split per user" model, the popular artist gets 100x the payout of the small artist. An interesting question then is whether big or small artists are disproportionaly listened to by people that stream a lot. I haven't seen any data on it, but intuitively it wouldn't surprise me if it's the latter case.

danpalmer 3y ago
You're right that it also favours artists that are listened to by people that stream a lot of music, but it does favour big artists too. Big artists can make up their numbers by lots of streams from few users, few streams from lots of users, or both. Small artists tend to get a lot of streams from very few users, and lose out, so this suggests that earnings are more correlated to unique listeners than to average listens per user.
- Denvercoder9 3y ago
  If with lose out you mean that it's not financially sustainable for them, then it's not at all clear to me that's caused by the way Spotify splits revenue, instead of Spotify just being too cheap for users to make streaming viable. Spotify takes in less than five bucks per Premium user per month, so after subtracting costs you need to quite a bit of listeners to make a living, even if Spotify shares it payout per user. If with lose out you mean that Spotify pays out less per stream to small artists as opposed to big artists, then that's not the claim made in the parent comment nor one I've been able to find any evidence for.
  - danpalmer 3y ago
    My understanding is that the amount of money spent on music by consumers has dramatically increased in the streaming age. It's not clear to me that Spotify only passing on ~half after fees is any different to a CD bought in a shop that pays rent and needs manufacturing, physical distribution, etc. I'm fairly sure this is not about Spotify being too cheap, it's that the revenue distribution skewed in the transition from CDs to streaming in favour of popular artists.

circlefavshape 3y ago

> They put all the streams in one pool and then split from there. Popular artists get almost all of it. ... but that's because popular artists account for almost all the streams, right? I don't think a per-user split is any fairer, it's just different, and there's no clear evidence on whether there'd be less of a gap between big and small artists with a user-centric split.

bad_user 3y ago

> "They put all the streams in one pool and then split from there. Popular artists get almost all of it." Like they should, mostly because they drive Spotify subscriptions. It's fair because there is a strong correlation between popularity and work, coupled with talent. > When you spend $10 or whatever on streaming, you'd expect $7 to be split between the artists you listen to, but it's not. Even if they'd distribute your subscription to your favorite artists, the total revenue for those artists and their share would still be mostly the same. Only in some degenerate scenarios, where you listen to only one obscure artist that nobody listens to, would those numbers be any different, and not by much. > This is the way it is because big artists have big name labels. Economies of scale probably apply. Like they should. ;-) Talented artists can often sign with big labels. And isn't it wonderful that in 2023 you can publish your work, on Spotify and elsewhere, without having to sign with a big label?

ClumsyPilot 3y ago
> they drive Spotify subscriptions There is no reason to believe this is true - I can download all the main artists in 30 minutes. Its the niche ones that I enjoy discpvering and wouldnt bother to download > there is a strong correlation between popularity and work, coupled with talent. Even stronger correlation between marketing spending and popularity > Only in some degenerate scenarios, where you listen to only one obscure artist that nobody listens to, This is waay too disrespectfull
- thegiogi 3y ago
  I think he’s using degenerate in the mathematical sense.