> You'd expect the artist(s) of the record to get my $12 minus a service fee, but what I'm sure happens is the artist(s) only get the price per play x 3 and Spotify pocket the rest.

I think companies like Spotify end up spending 60-70% of that $12 on paying license fees, which include per-play amounts that eventually end up with the artists. And the structure of those deals is such that the groups with the biggest licensing deals get most of your $12, even if you didn't listen to music from that particular artist.

I agree that it's not what you (or I) want, but it does make sense from the perspective of the largest parties involved in these negotiations.

The royalty systems are created for paying the pop industry. The niches and the long tail gets nothing, because it's divided according to stakeholder size and by playlists from major radio & broadcasters, not a fair cross section.

The question is would Spotify make money subscription revenue at $50 a month than $12. If the volume of subscribers at $12 is such to generate higher total subscription revenue then it makes sense to keep it low.

I think your point is pretty valid though, if I listen to 6 hours a day I am contributing way more towards band payouts than someone who listens to a few songs a day, even though I am putting in the same amount. The direct connection could actually encourage people to subscribe, have a page showing your contributions to each band you listen to.