Music streaming’s payout model is under a microscope. The industry’s stakeholders — the labels, DSPs, artists, and rights holders — all want more of the pie, but no one can agree on how.
Should we stick with the pro-rata model that pools all streams together? Or move to the user-centric model that some DSPs have tested out? Should longer songs count more than a 30-second audio track? What if that artist you choose to start your music session with gets paid more than an algorithmic play? How can we stop the fraud? Would all these problems get solved if prices increased?.
These questions are all up for debate. As growth slows down, everyone wants more of the pie.
To discuss, I’m joined by Bloomberg’s Lucas Shaw to break it all down. Here’s everything we discussed:
[0:42] How this debate started
[6:59] Proposed multiplier model
[10:43] Pro-rata vs. fan-centric models
[13:54] Factoring streaming duration without fraud
[17:38] Will big players budge?
[19:22] Monetizing fandom
[27:21] What if Spotify raises its prices?
[29:48] 2024 predictions
[32:11] Bloomberg’s Screentime conference
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Host: Dan Runcie, @RuncieDan, trapital.co
Guests: Lucas Shaw, @Lucas_Shaw
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TRANSCRIPT
[00:00:00] Lucas Shaw: The artist are one constituency, and the record labels or another, the artist could say, well, we might be happier if the record labels gave us a bigger share. And so, the best way, again, to keep all of those constituencies happy is to just grow the pie instead of reallocating and trying to sort of tilt it towards the big player.
[00:00:29] Dan Runcie Intro Audio: Hey, welcome to the Trapital Podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from the executives in music, media, entertainment, and more who are taking hip hop culture to the next level.
[00:00:55] Dan Runcie Guest Intro: Today's episode is all about streaming. It's the platform that saved the music industry, and lately it's been the platform that has sparked countless debates on how best to compensate rights holders, the artists, and the underlying companies that provide these services. This has been a polarizing topic ever since the beginning of streaming, but these topics have intensified recently for a few reasons.
First, growth is starting to slow down. We're no longer in the 2017, 20 18, 20 19. Fast growth rate of streaming. Growth is starting to slow, and whenever the pockets tighten up, people get more concerned about how that current pot of money is split. Second, two of the biggest major record labels, universal and Warner, have went public in recent years, and there's more pressure, especially from those new shareholders.
That wanna see returns for the big investments that they made. So how does this all shape the broader questions around how big the pie is, how the pie gets split, and what are the best ways to increase that pie? So join me in this discussion. I'm joined by Lucas Shaw from Bloomberg. He also is a frequent guest on the Town with Matt Bellamy, highly recommend that podcast if you haven't yet. And on today's episode, Lucas and I break it all down, all the facets, all the interests of the various stakeholders. It would make a few predictions in how we think this whole dynamic, this whole debate, how we think it plays out. Here's the episode. Hope you enjoy it.
[00:02:16] Dan Runcie: All right. We have Lucas Shaw here with us from Bloomberg. First time on the pod, welcome.
[00:02:21] Lucas Shaw: Yeah. Thanks for havin
