Comment by elbasti | Hacker News Reader

Comment by elbasti | Hacker News Reader

> And streaming is not returning enough to musicians for them to survive; it is only serving to increase income inequality in our industry. The revival we need, urgently, is of recorded music income - and that revival is not coming from silver discs.

The fundamental problem is that streaming income is distributed as a percentage of total (worldwide) plays, instead of being normalized as a percentage of plays per listener.

Let's say that Olivia Rodrigo accounts for 2% of all plays on Spotify this month. Even though I have never heard one of her songs, she's going to get 2% of whatever percentage of my subscription goes to royalties (75% I think, or $7.50). So even though I have never heard her music, she's getting my money. By the same logic, even if I spent 100% of my time play Obscure Band, they are getting basically nothing.

Instead, Spotify should pay artists as a percent of plays per listener. So if 10 indie artists this month account for most of my streams, they would each get ~0.75 each. Which is starting to look reasonable.

If everybody did the same amount of listening the two schemes would be the same. Since they don't, your proposed scheme gives an outsize vote to people who listen less. The current scheme gives a bigger vote to those who listen more. Spend more time than average listening and your preferred bands will get more money from the royalty pool than you put in.

That math is incorrect. Imagine a simplified world with 100 listeners. They are all average listeners and listen to 10 songs per day, for a total of 1000 plays per day.

99 are pop fans and listen entirely to top 20. 1 is an outlier and listens entirely to jazz.

Royalty payments are $10/mo per user. ie every month there's $1,000 to be split between artists.

Under Spotify's current scheme, top 20 artists receive ($1,000 * (999/1000)) = $999 dollars. Jazz artists get $1.

Under my proposed scheme, top 20 artists would receive 99*10 = $990, while jazz artists would receive $10.

In other words, multiplying the income of "smaller" artists by 10x. Artists shouldn't get money from people that don't listen to them.

> Under Spotify's current scheme, top 20 artists receive ($1,000 * (999/1000)) = $999 dollars. Jazz artists get $1.

There are 1000 plays per day (total) and 990 of those are pop—not 999. Pop artists receive ($1,000 * (990/1000)) = $990 dollars. Jazz artists get ($1,000 * (10/1000)) = $10. Which is the same as your proposed scheme, because everyone listens to the same amount of music.

If the jazz fan listened to five songs per day, all else being equal, then the current scheme would allocate ($1,000 * (5/995)) = $5.025 to jazz and ($1,000 * (990/995)) = $994.975 to pop. Which is clearly a bit unfair since the service is being paid $10 for the jazz and $990 for the pop.

However, if the jazz fan listened to 20 songs per day then under the current scheme jazz would get ($1,000 * (20/1010)) = $19.80 and pop would get ($1,000 * (990/1010)) = $980.20. Which is also a bit unfair, but in the other direction. The current scheme isn't necessarily biased against small artists, but rather against subscribers who don't listen to much music, and the artists they prefer.

>> top 20 artists receive ($1,000 * (999/1000)) = $999 dollars

This is where your math seems wrong, how come there are 999 plays of pop songs from 99 fans? should be 990, right?

However, if the pop fans listen to 10 songs per day, and jazz fan only listens to 1 or 2, then yes, some of jazz fan's money would go to pop artits.

If everyone listened to the same amount of music in proportion to the amount they're paying it wouldn't matter which way the royalties were calculated, as the artists would get the same amount either way. Money is fungible, so it doesn't matter whether they get your subscription fee or a much smaller slice of all the subscriptions as long as you listening to their music leads to them getting at least $7.50 extra that month.

The discrepancy is in the fact that those who listen to less music on a flat-rate plan pay more per track, which is not accounted for in the "percentage of worldwide plays" metric. If there are, say, an average of 100 tracks played per subscriber per month, and you play 1000 tracks from your favorite indie artist (even non-exclusively), they're actually doing better with this "worldwide plays" metric than they would otherwise—each play is worth about 7.5¢ ($7.50 for 100 plays), so they'd get $75 based on your activity. You contribute more plays but not more money compared to other subscribers, which means other subscribers are subsidizing your music preferences. However, if you only listen to 10 tracks per month, even if they're all from the same artist, the situation is more like what you described, with most of your subscription going to support artists you don't listen to. In this case they'd only get 75¢ of your $7.50.

So to optimize the royalties to your favorite artists, the real question is: Do you (and other fans of indie music) listen to more music than the average subscriber, or less?

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