Their pro-rata model is a joke. It's designed to favor big labels who btw are also shareholders of Spotify.
For those who don't know, the money of subscriptions goes into a big pot and then it's distributed based on the total number of plays. Which means the subscription I'm paying, for the most part, doesn't go to the artists I listen to but instead goes to the big labels who represent popular artists.
It's as if, back when people bought physical records, Madonna got money when you bought a record from some indie band.
That's why they were bitching about nature sounds and white noise eating into their money. A lot of people listen to an hour of music during the day then listen to 8 hours of rain while they sleep.
Which she likely did, as from my understanding owning the inventory is standard for music stores, so due to the higher demand it’s more likely the bulk of your money would go to buying Madonna records than buying The Smiths.
We both pay $10 a month. This month, I listen to 99 songs from a single artist, and you listen to one song total. $9.90 of my money goes to my artist, and $0.10 goes to your artist. $9.90 of your money goes to my artist, and $0.10 goes to your artist
$10 of my money goes to Spotify, and $10 of your money goes to Spotify. Then Spotify pays artists based (somehow) on how many times their songs played.
$19.80 goes to one artist, and $0.20 to the other. 99:1.
edit: Maybe what you're getting at is that the person who listened to only one song should pay 99x less. Then it really would be pay-per-play. But Spotify is a subscription service. What else should they do with my extra $9.90? Send it all to the one artist? That would be interesting... but then what if I don't listen to any songs in the month? Bank it and send it to the spread for the following month?
I think the more important point here is that the popular artists supported by big labels become black holes, sucking in all the money. It doesn't matter that you, and all your friends, and all your friends' friends, all listen to the same 3 niche artists day in, day out - approximately all of yours and theirs money will go to some pop artists none of you ever listen to, simply because that's what a much larger general population listens to.
So, it's like 99:1 ratio, but 99 side is Lady Gaga and friends, and 1 is all the indies and niche artist around the world together.
Before streaming with pro-rata royalties, when you bought a record, some money went to the artist of the record (after distribution cuts etc).
Of course Spotify doesn't care. They have to give up 70% of their revenue anyway. But the distribution of this money is the important part and of course pro-rata benefits big labels who have control over the catalog on Spotify and are shareholders.
Their pro-rata model is a joke. It's designed to favor big labels who btw are also shareholders of Spotify.
For those who don't know, the money of subscriptions goes into a big pot and then it's distributed based on the total number of plays. Which means the subscription I'm paying, for the most part, doesn't go to the artists I listen to but instead goes to the big labels who represent popular artists.
It's as if, back when people bought physical records, Madonna got money when you bought a record from some indie band.