Comment by klabb3 | Hacker News Reader

Comment by klabb3 | Hacker News Reader

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Yes, it's very important piece of Spotify's rev share model, it has arbitrage built in(!), most people are not aware of this.

Spotify pays PER STREAM, meaning that a bot account can funnel a massively disproportionate amount of revenue compared to a human one. In fact, you can generate more revenue than your subscription costs. Artists have complained about this forever, because 24/7 playlists at the gym with Justin Bieber on repeat would "steal" from the indie enthusiasts. And they are right! If I use my account to listen to one band only, my $10 contribution should go to them (modulo taxes, margins etc).

I'm sure they have "patched" some of these holes in recent times (ie some half baked abuse detection system that scammers can circumvent easily). But the per-stream principle remains, and it's such a massive incentive fuck-up from every angle, beyond salvation. And now they have (predictably) content farms and money laundering at their necks, and they're still not patching it.

> If I use my account to listen to one band only, my $10 contribution should go to them (modulo taxes, margins etc).

I'd argue that pooling the funds and divvying it up evenly across all played songs is actually the most fair. If anything, your implementation would be more prone to scammy content farmers (e.g. spammers using trials/locale pricing arbitrage to play only one $SCAM_ARTIST song per account).

Most importantly, however, your model is just not how memberships work in the real world. HBO doesn't (and shouldn't) reward a TV show with more budget because you only binged one TV show despite having access to all the show. Nor do gym memberships. Do you think Costco shouldn't allocate your membership funds for their gas stations because you have an EV? What about cable TV? What about your local/state/federal taxes?

> your implementation would be more prone to scammy content farmers (e.g. spammers using trials/locale pricing arbitrage to play only one $SCAM_ARTIST song per account).

Wat? You're saying that if you misimplement it and count all users including free/trial as equal paying you could get problematic incentives? Well, yeah. The point is today you have correctly implemented per-stream and there is a massive open arbitrage. A bot account can control 100-1000x of revenue compared to a human.

> Most importantly, however, your model is just not how memberships work in the real world. [...]

Spotify doesn't produce music, they act as middle man between you and the artists you listen to. There's a reasonable expectation that Spotify takes a cut between you and the artists you listen to, similar to an app store. Splitting your contribution between the artists you're listening to makes sense and importantly does not have arbitrage for content farm spammers (modulo a tiny bit of value from stolen accounts).

HBO and Costco aren't just funneling money around, they're producing physical goods and content, so it doesn't apply directly. You could make a more convoluted argument that they should follow the same principles but it's really not clear what that would mean, so I'm not gonna defend it. Same with taxes, I don't know what either per-stream or per-customer would even map to in that space.

i cannot fathom how your example here supports the idea that Bieber playing 24/7 in a gym is stealing money from the niche artist who are listen to by only a handful of fans?

I think the idea is that there are two Spotify subscribers in the whole world.

You, who listen to IndieBand™ for a total of an hour a week or so.

The Gym™ who plays Bieber 24/7 every day, all month.

You each pay $10 a month, so $20 total. Spotify allocates based on plays, so Bieber gets 720 "played hours" and IndieBand™ gets 4. So Bieber gets 720/724 of the $20.

The OP is saying in this case, Bieber should get $10 and IndieBand™ $10 (minus fees, etc).

Exactly. Per stream means that accounts that play music 24/7 are allocating orders of magnitude more revenue than yours or mine, much more even than what they paid in subscription fee. It's an open arbitrage incentive model, ripe for minimum risk exploitation by gray hats. Of course, this practice has the ability to erode actual artist revenue, which is already very low.

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