Hip-hop benefits, classical music loses
How should revenue from music streaming be distributed? Under the current model, people also pay for music that is not listened to. A new study by the University of Hamburg and Kühne Logistics University has now calculated this effect.
Currently, the money that streaming services such as Spotify earn through usage fees or advertising is distributed to rights holders using the so-called pro rata model. This means that all revenue is pooled and allocated to an artist based on their share of total views. This means that users could also pay for music that they do not listen to.
"Since the share of total streams is responsible for the money paid, genres with short songs that are listened to by a segment of users with long listening times and low budgets benefit most," explains study leader Michel Clement from the Faculty of Business Administration at the University of Hamburg.
The main focus of the study, which was conducted in cooperation with the University of Hamburg and Kühne Logistics University, was to compare the pro-rata model with an alternative, user-centric model. Here, each user's revenue is allocated to the artists they have listened to in a given month - in other words, on the basis of individual usage.
The researchers analyzed data from an online panel survey of the German population. Among other things, it included individual information on the duration of use of streaming services, any subscription costs paid and the genres listened to. The data was linked to the information available from the streaming services, for example on the most listened-to artists and their most successful songs.
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