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Comment by dkuntz2 | Hacker News Reader

Or, the current payment system used in streaming music...

I saw a proposal once that I really liked, instead of having all money go into one large pot, and have that distributed among all artists based on the total number of plays, have each subscriber's money distributed out by the songs they listened to.

Basically, instead of having your money combined and split with everyone else for all artists, it goes only to the artists you've listened to, and with amounts based on your listening habits, and not the collective habits.

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This is a strange proposal. Assuming everyone paid a fixed subscription fee and listened to the same amount of music each, the artist payouts would work out exactly the same.

In practice people vary in their usage of these services. Basically the artists you listen to would get paid more per play if you didn't use the service much. (i.e., if I only fired up Spotify once this month, listened to one track, then the artist gets my full $14 for one play)

I don't think that's true on the payouts front (I'll get to that in a second).

Yes, if you listen less, the artist you listen to get more. Which I don't think is a bad thing, because theoretically using the current system if everyone listens to less, all the artists get more per play.

This system, while not perfect, gives your money to the artists you listen to and support, as opposed to helping give lots of money to artists you probably couldn't give a damn about.

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As for the payouts, I don't think you did your math...

Example:

Person A listens to four songs by Artist 1.

Person B listens to five songs by Artist 2.

Person C listens to two songs by Artist 1, and four songs by Artist 2.

Assuming that $10 goes directly to the artists from each listener, in the huge pot system, artist 1 is played six times, and artist two is played nine times. Artist 1 gets $12, and artist 2 gets $18.

In the individual distribution, artist 1 gets ~$13.33, and artist 2 gets ~$16.77

I think that matches what I was trying to say. In the individual distribution, Person A prefers Artist 1 and his listens are worth more because he used the service less.

I'm not saying this is worse necessarily, I'm just not sure why it's better.

I don't know that their listens are worth more or less, but I think that it's arguably more representative of an individual consumer's choices (I hate that I just used that phrase...).

I might hate an artist you listen to, and don't think that any of the money I put down should go towards that artist. Similarly, you might hate an artist I listen to, and don't want any of your money going towards them.

In regards to worth, I think a better measurement would be percentage of a user's listens, as opposed to number of listens. While the percentage is based on the number of times they listened to an artist, looking at the percentage only somewhat weakens the argument based on someone listening less being worth more. That argument doesn't really hold with me because you can get the same payment numbers by just multiplying all artists by the same number, and while each individual play is worth less, the artists are still getting the same payout.

Basically I think an individual distribution is superior because .. wait for it .. it's more representative of each individual's listening habits over the collective's habits. Because of this, there's a large potential for smaller, less recognized bands to make more money, because they're paid for the percentage of times the people who listened to them listened to them, as opposed to the percentage of times EVERYONE listened to them.

The music site Magnatune (http://magnatune.com) does that. They split your money into two piles, one for downloading (you can download anything you want) and one for streaming.

While I don't know exactly how magnatune works, what you've described is completely different from what I've said, unless your streaming pile is distributed only among artists you streamed, and not put together with everyone else's money and distributed among all artists.

Having just superficially perused Magnatune's info pages, I couldn't find anything specifying how they determine the amount given to artists, other than 50% of it goes to artists, and the other 50% goes to Magnatune...

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