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Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

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Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#11
post #3

An interesting way to tackle this issue could be user-centric payouts. [0] It feels like a fairer system but it has yet to be tested at a large scale. [0]: https://musically.com/2020/05/13/what-are-user-centric-music...

Does it make any practical difference? Surely in aggregate the totals end up broadly similar?

That's discussed in the original link. It makes a big difference.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#12
I’ve been very interested in the user-centric model described, but I’m not aware of any streaming services using it. What are the chances that Spotify would make this an option? Even if it was just opt-in, that we go a long way to keeping me with them as a premium subscriber.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#13
post #9
post #5

> In any case, the user centric model gives more direct power to users to target the money they pay for the service to the artists or tracks they favour compared with the pro rata model, which is not transparent from their point of view. This is the model most people would think their money goes to. But the recording industry has never been intuitive. Or fair.

Yes and no. I did personally think (before learning more) that my monthly payment was divided to the artists I listened to. But all money is pooled to a single bucket from which money is then distributed to all artists. So even if I never listen to any of the 0.4% artists here, 9.9% of my payment goes to them anyway.

It’s worse than that, because as a paying subscriber you are subsidizing listens coming from free/ad-supported accounts too.

In fact, other users take away your money from artists you like if they are a heavier user of the service than you - as they get more of the total pot in current system. From the point of view of the big labels who have control this is a feature not a bug. http://www.serci.org/congress_documents/2019/user_centric_re...

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#14

I’ve been very interested in the user-centric model described, but I’m not aware of any streaming services using it. What are the chances that Spotify would make this an option? Even if it was just opt-in, that we go a long way to keeping me with them as a premium subscriber.

Your best bet would probably be youtube music with a youtube premium account.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#15
post #2

On Spotify, the top 0.4% of artists are responsible for 9.9% of streams.

And premium users pay for everyone's streams. That's one of the conflicts, and the other is that those who listen to fewer plays get less influence than those who listen to many. So even if all the premium users prefer jazz (for example), their money will mostly go to whatever the free users prefer listening to.

If spotify itself was seen as a market - I wouldn't say that this would be a very well-functioning market, because of the mismatch between what you use and who you pay.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#16
A fair model would be to charge users a pay-as-you-go rate for every minute listened.

Someone who listens 20 hours a week should pay more than someone who listens 5 hours a month on Spotify. Just set a rate/minute and track each user's usage and bill them monthly.

Then pay the same rate/minute (minus a super small commission %) to the artists of whom the music was streamed.

This would mean that artists get a fair share for what they contribute. If Madonna releases a new album which is a flop then why should she still get the same payout as her last album which was a hit? Equally, if a new artist releases a real banger why should they get less for their talent only because their name is less established as someone else?

This model would also allow a platform like Spotify to push the rate/minute slowly up until they reach a point where demand and supply meet happily. We would be able to find the real value of good music which consumers are willing to pay.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#17

The algorithm for payment is dumb. If I pay £15 a month and only listen to 4 artists over that time (I’m very predictable) I want those 4 to get £3.75 each. But they won’t. Lady ga ha will get most of it.

Edit: just to bring this up a bit higher in the thread, replies like from u/kgermino, u/dtech, and u/anonymoushn are saying that popular artists rack up their number of plays from background noise (my wording, not theirs) whereas niche artists won't have that advantage. A bar or coworker might play a popular playlist a ton of times as background noise whereas your niche artist will have some dedicated people listening to it that don't rack up a meaningless play count.

This causes money to flow from subscribers listening to this niche artist to the more popular artist. That's a problem to which I see various solutions, like only including active clicks on songs or artists in the revenue distribution model, or indeed changing the model to be per user instead of by aggregate number of plays. So it's not really that it's unfair to pay artists more that are played more, it's that because of the way some people use Spotify, plays are racked up for reasons other than because their music is so great.

It effectively works in the way you describe, but aggregated instead of per user. So instead of splitting your £15 into 4, it splits Spotify's total revenue (minus service fee) among the artists listened to. If 100 million users listened to artist A and 50 million to artist B, and those are the only two artists listened to, then they get 100/(100+50)=67% and 50/(100+50)=33% of the revenue, respectively. Listening to certain artists still gets them more money.

So I'm not sure why you say that most of your money goes to a popular artist instead. Other people's money goes there because they listened to it, yours doesn't really if you look at an individual subscriber's level. It's a bit like electricity: you can purchase green power but of course they don't dig new cables to get you exclusively green power, they just pay the wind/solar/hydro farms instead of the coal farms for the part of the power that you used.

(Some notes I made for myself to make sure I got this straight, figured I could share them: If you listen only to artist A and 999 other people listen to artist B (everyone plays an equal number of tracks), then £15×1000=£15000 goes into the pot, and your artist will get 1/1000×15000=£15 and the other one will get 999/1000×£15000=£14985. Even in aggregate, it should work out, but please correct me if I went wrong somewhere!)

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#18

The algorithm for payment is dumb. If I pay £15 a month and only listen to 4 artists over that time (I’m very predictable) I want those 4 to get £3.75 each. But they won’t. Lady ga ha will get most of it.

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.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#19
It's quite fascinating to see the comments on this article as it's pretty obvious who clicked the link and who only looked at the title here at Hacker News. The article itself is called "Pro Rata and User Centric Distribution Models: A Comparative Study" and it's a study showing the difference between "pro rata" (what's happening today) and "user centric" (a user gives their money to the artists _they_ listen to). The fact about the "top 0.4% artists" is just one of the results they found while sampling 10k tracks.

Re: Pro Rata and User Centric Distribution Models: A Comparative Study (2017)

#20

A fair model would be to charge users a pay-as-you-go rate for every minute listened. Someone who listens 20 hours a week should pay more than someone who listens 5 hours a month on Spotify. Just set a rate/minute and track each user's usage and bill them monthly. Then pay the same rate/minute (minus a super small commission %) to the artists of whom the music was streamed. This would mean that artists get a fair sha…

This sounds stressful and complex to track and charge for..

Also, I usually listens to books/podcasts while I sleep, and when not sleeping I usually relisten large parts of them since I often wander away with my thoughts. This sounds horrible from my perspective.

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