I have often thought this method made more sense. It should not be total revenue / total streams, it should be what a single person pays going to exactly what they listen to.
It isn’t fair that someone who listens to a ton of things has a much greater say in how the money is distributed even though they pay the same as someone who only listens to one artist.
By that logic the most fair would be pay per play for every song, with some fraction to the artist. But subscribers really like the single payment for unlimited plays model.
Whether that is the most ‘fair’ method or not, a pay per play model wouldn’t be the best for either listeners, artists, or streaming company.
There is always this challenge for creating a business model around digital goods; there is a non-zero cost to create the good, but there is a near zero cost per unit of the good.
No one is going to want a pay per listen model. The heaviest users aren’t going to want to pay that much and will likely turn to piracy, and the lightest users don’t have that strong a desire to listen to music (as demonstrated by their light usage) to want to pay for each stream.
The advantage of a single price, all you can stream, model is that it generates revenue for artists AND it properly recognizes the fact that each stream has a near zero unit cost.
In my model, each listener generates a fixed revenue that is divided up amongst all the artists who create something that user listens to in the same proportion that they listen to it.
It would just mean your total fixed subscription cost is apportioned across all of the artists you play in the month in proportion. It’s not an extremely difficult calculation.
Yeah that would work, but then the more you listen the less each artist gets per stream. Which is less fair to the artists, especially for subscribers who listen to a wide range of artists.
Why is it less fair? The artist gets less revenue per stream, but it doesn’t cost the artist more per stream, and they are earning the revenue per user.
For example, let’s imagine a subscription service with just two users, paying $10 a month and each only listens to a single artist. The first user listens to their favorite album once a day, while the second user listens to their favorite album 9 times a day.
Would it be fair for the artist the first person listens to to only earn $2 while the other artist earns $18? Why should the money spent by the fan of Artist A be used to subsidize the support of artist B, even though they never listen to their stream?
This quirk of “divide by total streams” instead of “divide each users subscription by their particular stream” has lead to a type of fraud where someone will submit a song to Spotify, then create thousands of accounts that just listen to that song 24/7. Those 24/7 listening accounts have unfair say in who gets paid, so much so that you can make more than the subscription price just by having that user stream your songs.