That’s reasonable and fair, but removes a big incentive for musicians: going viral. Many creators are hopeful that by creating a really popular song or songs they can “break out” of a relatively modest earnings band and make it big. For a lot of artists, streaming revenue isn’t enough to live on and thus touring/album sales/promotion/label ownership/other jobs need to be part of their lives. Many of them fantasize about making something so popular that they can do less of that.

Removing the hours-played incentive puts a lot of downward pressure on the curve of “revenue increases when a song/album goes viral”. You still get some of that via massively increased listener counts when you go viral, but with your proposed formula, that number is way attenuated by the number of artists the average person listens to.

Spotify and friends have an incentive to attract and keep lots of artists so they’ll release new content on the platform promptly. Having a revenue model that pays big dividends in the event of a breakout hit is key to attracting artists and/or their labels.