{"title":"Rethinking royalties: alternative payment systems on music streaming platforms","authors":"","doi":"10.1007/s10824-024-09507-z","DOIUrl":null,"url":null,"abstract":"<h3>Abstract</h3> <p>Music streaming changed the recorded music industry’s business model from individual product sales to unlimited on-demand access subscriptions. The streaming platforms experienced strong growth during the 2010s and now drive most of the industry’s revenue, up to 90% in the most mature markets. Until recently, the payment system for rights holders had remained unchanged. Many industry stakeholders criticise the system’s alleged unfairness, and artist organisations, independent labels and major labels all propose different ideas to ‘fix’ the music streaming payment system. The current ‘pro-rata’ payment system pools all subscription fees, with each rights holder receiving a payment proportional to their share of the accumulated number of streams. The system does not look to align the individual users’ payments with their actual musical preferences and consumption. Therefore, this paper defines the problem of the current music streaming payment system as its allocation of equal value on all streams. The paper proposes a framework to systematically evaluate alternative payment systems inspired by policy analysis and planning. It additionally contributes with a structured evaluation of six alternative payment systems that rethinks how streams are calculated and remunerated to restore the price discrimination between different listening behaviours. The paper finds that developing a mixture of the alternative systems can likely solve many of the current system’s challenges. Furthermore, the paper analyses and discusses the new payment system changes to be implemented on Deezer and Spotify.</p>","PeriodicalId":47190,"journal":{"name":"Journal of Cultural Economics","volume":null,"pages":null},"PeriodicalIF":1.9000,"publicationDate":"2024-03-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Cultural Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s10824-024-09507-z","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Music streaming changed the recorded music industry’s business model from individual product sales to unlimited on-demand access subscriptions. The streaming platforms experienced strong growth during the 2010s and now drive most of the industry’s revenue, up to 90% in the most mature markets. Until recently, the payment system for rights holders had remained unchanged. Many industry stakeholders criticise the system’s alleged unfairness, and artist organisations, independent labels and major labels all propose different ideas to ‘fix’ the music streaming payment system. The current ‘pro-rata’ payment system pools all subscription fees, with each rights holder receiving a payment proportional to their share of the accumulated number of streams. The system does not look to align the individual users’ payments with their actual musical preferences and consumption. Therefore, this paper defines the problem of the current music streaming payment system as its allocation of equal value on all streams. The paper proposes a framework to systematically evaluate alternative payment systems inspired by policy analysis and planning. It additionally contributes with a structured evaluation of six alternative payment systems that rethinks how streams are calculated and remunerated to restore the price discrimination between different listening behaviours. The paper finds that developing a mixture of the alternative systems can likely solve many of the current system’s challenges. Furthermore, the paper analyses and discusses the new payment system changes to be implemented on Deezer and Spotify.
期刊介绍：
Cultural economics is the application of economic analysis to all of the creative and performing arts, the heritage and cultural industries, whether publicly or privately owned. It is concerned with the economic organization of the cultural sector and with the behavior of producers, consumers and governments in that sector. The subject includes a range of approaches, mainstream and radical, neoclassical, welfare economics, public policy and institutional economics. The editors and editorial board of the Journal of Cultural Economics seek to attract the attention of the economics profession to this branch of economics, as well as those in related disciplines and arts practitioners with an interest in economic issues. The Journal of Cultural Economics publishes original papers that deal with the theoretical development of cultural economics as a subject, the application of economic analysis and econometrics to the field of culture, and with the economic aspects of cultural policy. Besides full-length papers, short papers and book reviews are also published.Officially cited as: J Cult Econ
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