How would user-centric payouts affect the music-streaming world? | Hacker News Reader

How would user-centric payouts affect the music-streaming world?

musically.com

69 pointsanotherevan51 comments

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.

Interesting idea, and not that it doesn't happen now, but I can just see streaming services making deals with major record labels to do stuff like autoplay, and pushing major label songs very very hard.

I think Youtube Red does something like this.

YouTube red distributes money according to watch time per month.

I use music streaming services mostly for their shuffle features, not for playing music I select. I'm not a fan of this idea, because then those services would be able to pick winners and losers (the artists) based on a shuffling algorithm I don't have control over. This creates a perverse incentive where labels could try to influence the frequency of their artists in those shuffled playlists over smaller labels and independent artists.

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.

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

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.

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 :)

You’re neglecting what fraction of users actually listen to indie artists’ music. It does hurt payoffs when listeners listen to more (diverse) music, but the payoffs are not diluted by the masses who individually listen to less, but cumulatively listen to much more music from mainstream artists. This combined meta-user is listening to a LOT of music, of which dilutes the number of plays of indie music. As long as there are users who listen to mainstream music but not indie music, indie artists will always be better of under the proposed scheme.

My intuition says that an example of Simpson’s paradox might be hiding here, in case someone is interested in constructing the mapping and making it explicit.

> As long as there are users who listen to mainstream music but not indie music, indie artists will always be better of under the proposed scheme.

I don't think that's right?

Let's say there are 99 users who listen to 10 mainstream tracks per month, and 1 user who listens to only to ABC band. As I understand it, ABC band gets 1% of the total share of the total pot under the user-centric model.

Under the current model, though, if the ABC band listener listens to 100 ABC band tracks per month, while the mainstream listeners listen to 50 mainstream tracks per month, ABC band makes up 100 of the 5050 total plays, almost 2% of total track plays. So under the current system, ABC band makes nearly twice as much under the current system than the user-centric system.

Suppose in addition to those 100 users you had 2 coffee shops that play the top 40 on repeat 18 hours a day. At least I think that is what was suggested.

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.

Isn't it enough for you to stop using this service? If not, care to share why?

That wouldn't achieve anything. The broken payment model remains.

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

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

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.

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.

Crunchyroll (probably the largest and most visible Anime streaming service) does, see: https://www.otakujournalist.com/where-your-crunchyroll-dolla...

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.

Does Bandcamp work for you? I mean, they don't offer a streaming subscription, but you have access to all purchased music through the app.

May not be what you're looking for, but I believe Magnatune does that: http://magnatune.com/info/faq_buyers#musicians

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.

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

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

Related from a few years back: https://medium.com/cuepoint/how-to-make-streaming-royalties-...

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.

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

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.

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?

Actually you never owned "the music" you just own the physical copy in such cases, if that makes you feel more an "owner" you can still buy CDs for most of the artists even vinyl in some cases if not you can always buy and download, most of the music i listen i get it from Beatport you just pay and download no DRM no BS.

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-...

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.

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?

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

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.

I don’t see how this isn’t solved by swift having -more- streams.

Agreed. The Van Gogh vs kindergarten painting example is a poor comparison - that would be more in line with buying the rights to all future royalties of a Taylor Swift song vs that of an unknown tuba player.

This does make me wonder though - is there any market for recorded musical works as there is for physical works of art? For example, could the collective stakeholders in a Taylor Swift hit sell their share of future earnings based on a risk adjusted valuation of projected earnings? There would be implications for earnings on tour but interesting nonetheless.

Because the value of each of her streams is larger than the value of a single stream of another artist.

It isn't the total $, it is the $/stream.

Would you pay the same to see a Van Gogh painting that you'd pay to see your local 3rd grader's painting? (not you personally, think of the average person).

This argument isn’t justified by the example you present.

Sure it is.

If you had a museum with a single painting, and you charged $10 for the entry, would you rather have a Van Gogh or a 3rd grader painting?

Which one do you think people will be willing to pay for?

And if you had a museum with two painting, a Van Gogh and a 3rd grader, and you pay a % of your ticket price back to the artist. Would you pay the same % to Van Gogh as you'd pay to the 3rd grader?

I'd pay based on the number of views. The Van Gogh is likely to get more views than the 3rd grader.

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... and lo and behold it's there too. (warning: album title is a bit nsfw)

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.

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

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

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).

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.

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

Likewise.

this is the last place I expected a viper plug.

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