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Comment by westwing | Hacker News Reader

The algorithm isn't dumb at all. Lady Gaga is relatively more valuable for the platform, so she can ask for a bigger slice of the pie.

If all you wanted was a streaming platform that didn't have all these major artists on it, it could be provided for much less than £15.

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> If all you wanted was a streaming platform that didn't have all these major artists on it, it could be provided for much less than £15.

This sounds like economies of scale but backwards, which makes me suspicious of this claim.

"economy of scale but backwards" describes the whole content industry, doesn't it? At your local shop you will typically pay more for a hit album CD with millions of copies made compared to an indie release with maybe 100 copies made.

The economies of scale for Spotify reduce the cost of their technology as measured in dollars per user, but since the majority of their costs are in artist payments the tech costs don't matter as much.

It's more complicated than that. If economics of scale applied to music pricing, why do records cost all more or less the same?

A small act can't support itself from licensing fees alone either way, it would make sense to settle for less, or waive fees entirely, just to increase exposure.

Yes she can ask for it, and get it. But that isn't good. It means the smaller artists are subsidising her. She is taking money for listens to other people's songs. I don't mean to victimise Lady ga ga here of course. It's just that the bigger artists are only getting any decent money at all because the smaller ones get virtually nothing.

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