SXSW Music 2016

Making Streaming Royalties Fair(er)


Streaming royalties from subscription services like Spotify, AppleMusic, and others are distributed using the "Big Pool" (pro-rata) distribution method. There are questions as to whether this method of royalty distribution is fair or even in the best interests of the music industry (artists, labels, and services). A new approach is the "Subscriber share" model. Subscriber share distributes royalties based on the plays of each individual subscriber instead of pro-rata across all subscribers. Can the subscriber share approach to royalty distribution increase royalties for artists with fan bases as music streaming services start to scale?

Additional Supporting Materials


  1. Does subscriber share income distribution provide a better pathway for artists (small or large) with fan bases to make a living wage?
  2. Is click-fraud a serious issue for music services and royalty recipients? How does it impact revenues for artists using the existing pro-rata model?
  3. Why the music industry should push digital music services to evaluate subscriber-share distribution.



Dick Huey, Founder, Toolshed

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