Streaming services have become a foundation of the music industry. Millions of people subscribe to these services to enjoy their favourite music at any point in time. Spotify gives people the right to use the music of their favourite artists any time they wish for as long as they want. This effortlessness of access and amount of control user has over their music may help an artist to make money.
Many years ago, artists were doubtful about making a move from analogue to digital music. Nobody was sure how anyone could make a profit from downloads. Musicians were in deep thought and aggravate that after the transition to digital music, how particular concentration will be paid to the threat of music piracy.
Spotify to let artists promote music in user recommendations in exchange for different royalty rates
At a foremost glimpse, streaming platforms don’t look like they will be beneficial for the musicians. For a smooth monthly fee, users get unlimited access to listen to as many songs and plays as they would like to play. Furthermore, these platforms have to pay artists to publicize them. But when you have a close look, you will see an expertly controlled business model. This model is based on how many times a song has been played, as well as the number of subscriptions made each month.
The technique Spotify and Apple Music pay to artists for their music, and their work is straightforward. These companies take the money produce from users, whether by advertisements attained through companies or any subscriptions made by the users.
After that, they put all the money in a different place. They then divide that money by the share of streams each artist received.
This type of payment is called a pro-rata system. Everyone does not even like this system. Most of the people in the music industry would prefer a payment system that is called a user-centric approach. Under this system, each user gets payment based on what they streamed.
The main difference between both the payment system is the preferences of users.