There has been lots of debate about whether ‘user-centric’ payouts, where the royalties from each individual music-streaming subscriber would only go to the music they listen to, would be an improvement for the music industry. And crucially, for musicians.
The latest study attempting to understand the potential impact of this model was commissioned by Pro Musik, a German organisation representing freelance musicians. Called ‘Payment Option Transparency’, you can read it online here.
Pro Musik is stressing that it is not advocating for or against the user-centric model, but rather than it just wants more information to be available to artists and the industry about what its effects would be.
Among the headline findings: across the 18 countries studied for the research, its authors estimate that as much as 32.6% of the total royalties from music subscriptions could be redistributed under a user-centric system.
By its reckoning, 29.3% of artists would see their royalties increase by 40% or more under any such change from the current ‘pro rata’ model, including 19% who would double their streaming earnings.
Where there are winners, though, there must also be losers. Pro Musik’s report estimates that 38.8% of artist profiles would see their royalties decrease by more than 40% under a change to user-centric.
The report also explores some of the factors that would determine which group (or, of course, the 31.9% who are in the middle) artists would belong to.
“In a nutshell, an artist profile would be incentivized for reaching a relatively high number of users, for when its users commit much of their listening to the artist profile’s content and for appealing to an audience that is willing to contribute the most money to the system,” is its summary conclusion on that thorny question.
(A key point, this. It’s not as simple as ‘big artists lose and small artists win’ or ‘major-label artists lose and independent artists win’ or even ‘pop and hip-hop artists lose and jazz/classical/rock artists win’.)
There are some slider bars that artists can play with on the report’s website as a way of understanding how user-centric payouts might affect their income.
It’s a long and detailed report that is well worth your time if you’re interested in the streaming-payouts debate, as is this 2021 study by France’s National Music Centre, and this 2022 study by researchers from Hamburg University and Kuehne Logistic University.
We’d also point you to our own analysis of why Universal Music Group has been pushing for ‘artist-centric’ payouts rather than the user-centric model, and (if you’re new to all this) to our primer on user-centric from 2020. You can also browse our archives of user-centric stories.
“We need to discuss the payment model and together find a way to align revenue allocation with the value that artists create,” said Pro Musik chairman Axel Müller as its study was published today.
“Counting streams is a vary one-dimensional way to measure an artist’s achievements and we all need to find a more comprehensive approach to represent artistic success in music streaming. Our study is our first contribution to this essential conversation.”
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