Labels want to change how streamers pay: Find out if you’ll win or lose

A new study looks at how a shift from the current system of pro-rata music-streaming payments to user-centric payments would impact artists.

Under pro-rata music calculations, artists are paid proportionate to their share of the overall streaming volume. But UMG, Tidal, Deezer, and others are experimenting with a user-centric payment system (UCPS) wherein each user’s subscription fee is divided proportionally among artists based on the consumption of that individual user.

Who Wins and Who Loses?

While the study lays out its findings nicely, figuring out if an individual artist will be a winner or loser under a new payment structure can get a bit complicated.

Fortunately, the researchers created a tool that provides some answers.

By examining three key factors and playing with three sliders, you can get a pretty good idea of how an artist’s revenue will be affected. The factors that directly determine which artist will benefit from UCPS are:

1. User Reach (fanbase size): “My Relative User Reach Index is,,, (a score of 1-100)”
2. User Commitment: “My listeners stream me, among other artists, __% of the time.”
3. Average User Spend: “My Average User Spend Index is 100.”

User spend is measured in subscription revenue but could be expanded to include premium subscription tiers and other income sources driven by a fan’s interest in a particular artist.

You can simulate the impact of UCPS on an artist’s income here. Remember, trying to score yourself relative to other artists is important.

MORE: Study shows who wins and loses if music streamers adopt user-centric payments

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.