Users U1 and U2 have a the same subscription, and $10 of the fee they pay will be distributed to artists.

User U1 listens to tracks from artist A1 ten times.

User U2 listens to tracks from artist A2 190 times.

The $20 that U1 and U2 have paid are distributed to artists according to number of songs streamed. Artist A1 gets $1, and artist A2 gets $19.

It's counter intuitive that U1 effectively pays $9 to A2, without having listened to their songs even once.

The counter is also true that A1 gets money from people who have no idea A1 even exists. It's hard to say if one method is better or worse for the smaller artist. Basically, is it better to get a bigger piece of a much smaller pie or smaller piece of a much bigger pie. Without the data it's hard to know.

EDIT

I'll also add that the big name artists have value beyond the number of streams. A platform without Taylor Swift will have less overall users, less money for the royalty pool, less money for platform development, etc...

An interesting thought idea would be to create a streaming platform which only has artists outside the top..50? and see how it does.

Meanwhile U2-U99999 pay money towards A1 without having listened to them

I tried to pick a simple scenario to make it easy to see the faulty model, and assume that this version of Spotify has exactly two users and a catalog of exactly two artists.

The imbalance remains even if you scale it up. Artists that are listened to by users that listen to less than the average number of streams are underpaid in relation to the revenue they generate for Spotify.

If I listen to 10 songs in a month all by artist 2 and you listen to 1000 songs by artist 1, should my subscription money all go to artist 2 or should it 'subsidise' your listening to artist 1. That is the core question.

Basically do you put all the money in a pot and then split it, or do you treat each subscriber as a unit and split their subscription fee just among the music they listen to.

If I listen to artist 2 only I'd like all my money to go to artist 2, regardless of how popular artist 1 is.

That's how it worked with CDs: I buy the band I like and they get whatever pennies the mafia leaves them. But the pennies go from me to the band I like and to them only, not some $BIGPOPSTAR instead that I never listened to.

Let's say you pay $10 and I pay $10, you listen to 200 songs by Simply Red, while I listen to 50 songs by A-ha.

Spotify takes $14 (70%) of our money and divides it by 250, this means that Simply Red gets 80% of $20 or $11,20 and A-ha gets $2,80.

The unfair part is that my money got to pay for an artist I never listened to. Why not my share moved to A-ha?

> 80% of $20

Should of course be 80% of $14, $11,20 is still correct though.

Spotify charges a flat monthly fee to their customers, so the income per stream varies widely: Someone who listens to only one album a month is providing more income per stream to Spotify than someone who leaves it running as background 24/7, but the artist that recorded that one album doesn't get a proportional share of the income generated.