Streaming services, most notably Spotify (by far the largest) use what could be called a parimutuel royalty system: all the money collected goes into a big pool, Spotify takes their 30% off the top, and whatever is left is distributed to artists based on their share of overall plays. Spotify explains how it all works right here. It sounds perfectly fair and reasonable: if an artist wants to make more money all they need to do is get more plays. But there’s a major disconnect in this economic model that has not been discussed widely: Spotify doesn’t make money from plays. They make money froms subscriptions.