A bit of history
Since the years 2005-2010 and the birth of the first streaming platforms like Deezer and Qobuz, two French services, the uses around music have changed radically.
These services have made it possible toto savethe industry in the face of massive piracy music and the drop in CD sales. Today, platforms are the main source of income for the vast majority of authors and artists.
In 2021 on Spotify there are more than 420,000 artists to have more than 1,000 monthly listeners and more than 10 tracks available on the platform.
If you want to understand how TopMusic stands out from other platforms, it's here.
With the CD, the customer pays for a physical good at a fixed price, no matter how many times the CD is played.
Behind a fairly similar use on the platforms, hides very diversified remuneration models for artists, producers and authors.
With streaming, the predominant compensation model is called themarket-oriented model, (Global or Market centric in English),which opposes the user-oriented model (user centric) like at SoundCloud recently.
This specific point of remuneration may seem trivial, whereas itsignificantly changes the way user subscriptions are distributed.
The market-oriented model is the predominant model of the giants: Spotify, Deezer, Apple Music...
This model works as follows:
- we take at the end of the month all the listenings of all the songs of the users
- for each artist, we measure the ratio of their listening compared to the total
- all subscriptions are put in a common pot
- This common pot is then distributed according to the listening ratio
This model significantly benefits songs that are listened to repeatedly by certain users, compared to songs that are listened to less, for an equivalent subscription amount.
This model indirectly favors a specific song type. And imbalance the distribution of subscriptions.
For example 2 subscribers with a subscription at 10€/month each. One listens to music occasionally - say 1 hour per week - and the other very intensely 10 hours per week.
The first will pay 10 times less to the artists it listens to while the amount of the subscription is the same.A user-centric model will allow him to pay the same amount regardless of the listening time.
The second model is only usedonly by SoundCloud currently (since March 2021), and is mainly favored by independents against the majors (major record labels: Universal, Sony, Warner) who favor the market-oriented model.
The user-oriented model is centered on listening to the user alone, without comparison with the overall listening volume. If 30% of a user's plays are songs by the same artist, then 30% of their subscription share will go to that artist and the rights holders.
An in-depth study of the CNM (National Center for Music) demonstrates thatmoving to a user-oriented model would spread the revenue over a larger number of artists.
The diagram below illustrates the difference in remuneration between 2 artists. Artist 1 is listened to by 3 users, including one who listens in a loop, artist 2 is also listened to by 3 users but in a more balanced way.
On the one hand, it is the fact of being listened to more than others in general that is highlighted (MM, market-oriented model) on the other hand, it is the fact of being listened to by several different people that prevails.
Consequences for niche categories
The user-oriented model turns out, according tothis same report, be more beneficial for the so-called niche categories, among which - niche among the niches - French-speaking Christian music:
Deezer says the UCPS would result in a "trickle down" of royalties to the bottom of artists' charts as well as a revaluation of niche genres.
It is in the face of these shortcomings and imbalances of the models centered on all listening, that TopMusic positions itself to help develop Christian music.
Remuneration on TopMusic
TopMusic adopts a user-oriented model associated with tips.
Thanks to their subscription, Premium users have a pot that is more or less full depending on the amount.
During each month, the subscriber will be able to distribute his TopCoins to the artists of his choice.
The intention behind this model is to allow users to specifically support one or more artists, regardless of the listening time.
With this new model, for an equivalent audience size and depending on the rate of engagement with the artist,they will be able to multiply their income by 3 or even 10 compared to a traditional platform.
Artists and producers are paid both based on listening, which ensures a minimum income even without tipping, and both based on the TopCoins allocated to them.
The part of the tips is preponderant compared to the income from listening, because we want to leave more room for subscribers to support.
We thus arrive at a model which seems to us to be the fairest, because it remunerates both according to the listening time, the will of the subscribers to support the artists, and in a manner centered on the subscribers.
All this implies a considerable complexity of royalty calculations, a challenge that delights our engineers and lawyers 😁