How Streaming Music Royalties Are Calculated
Sharky Laguana (via Marco Arment):
The reality is only some of your money is paid to the artists you listen to. The rest of your money (and it’s probably most of your money) goes somewhere else. That “somewhere else” is decided by a small group of subscribers who have gained control over your money thanks to a mathematical flaw in how artist royalties are calculated. This flaw cheats real artists with real fans, rewards fake artists with no fans, and perhaps worst of all communicates to most streaming music subscribers a simple, awful, message: Your choices don’t count, and you don’t matter.
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The problem lies in the fact that this “Big Pool method” only cares about one thing, and one thing only: the overall number of streams. It does not care even a tiny little bit about how many subscribers generated those streams.
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Click fraud is rarely discussed in the context of streaming music, but it’s fairly simple for a fraudster to generate more in royalties than they pay in subscription fees.
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It’s worth noting that many (if not most) of these heavy-usage “subscribers” are probably not individuals at all. They are actually offices, restaurants, gyms, hair salons, etc. Businesses like these can stream up to 24 hours a day — far more you as an individual could ever hope to do. And they probably don’t share your taste in music either. But they pay the same $10 you do, so why do they get to decide where your money goes?
