The music industry has failed to agree on how to transition away from the streaming payment model that has prevailed for two decades, despite widespread agreement that the system should be remixed. A solution that overcomes common criticisms of alternative models is needed to break this impasse.
An economist and author of the book proposes such a solution pivot, Will Pageis “complete”.
Completion will reward songs played in full and penalize those skipped before the end. The best argument for this approach isn’t that it overcomes the pitfalls of scaling, or that it combats streaming fraud—it does both. The highlight of the proposal is its practicality: industry can implement it without encountering any of the transitional issues associated with other options. What’s more, Completion can easily be supplemented with further changes, including user- and artist-focused ones.
In proportional mode, streaming revenue ranges from less than US$1 billion Towards 2012 $20 billion By 2023. Critics say lighter users subsidize heavier users and that all streamers shouldn’t have the same value.
Direct migration to a user- or artist-centric system would come with significant transition costs. A typical streaming service provider has more than 900 contractual agreements, each tied to a complex royalty accounting system for two major copyrights. The worst case scenario would be audit hell.
Introducing a new system of award completion will avoid these costs because it will extend the core mechanism of current royalty accounting: thresholds. Today, for a stream to be compensated, it must exceed two of these. First of all, you must be able to play; secondly, its running time must be more than 30 seconds.
Achieving the third threshold where the song plays to the end is no more technically complex than the first two thresholds. It is easily legally defined, eliminating the risk of audit disputes. It satisfies the common desire to move away from proration while still allowing for the exploration of more desirable models.
The first question with any new proposal is almost always: “Who are the winners and who are the losers?” This is usually followed by the conclusion that whatever the merits of the new proposal, it won’t work because it will create failure . This argument is baseless—it ignores the fact that the current system also has winners and losers, and that winners and losers will change over time even if the system remains the same.
“Instead of focusing on winners and losers, why not ask whether the proposed intervention would make something already fair more fair? I believe this proposal does just that,” Willpage said.
However, if an industry that proves unwilling to change is to seriously consider the completion scenario, it is important to be clear about its strengths, weaknesses and potential unintended consequences. Page got to know each of them thoroughly in turn.
He writes that “finish”‘s main advantage is its common sense: When listeners skip a song before it ends, they act to show that they value the song less than if they had played it from beginning to end. First song. Rewarding songs based on how listeners rate them is a working definition of fairness.
Another benefit of Completion is that it will help solve the problem of streaming scams, as those harmful 31-second streaming farms will disappear overnight.
The main drawback is that Finish can inadvertently bias listening toward the rear. But if this is how the audience chooses to listen, it’s questionable whether this criticism holds water. Not to mention, it’s hardly any different than broadcasting. New data provided by Page shows that leaning back is a win in completion percentage, but only just.
He quotes his mentor David Safire: “Who do we define fairness for?” Brands, platforms or consumers?
“If consumers choose to sign a contract so they can lean back and listen, why should we disagree? After all, consumers are rarely wrong,” Page believes
Unintended consequences of completion include numerical anomalies, in which the completion of a two-minute pop song is more valuable than the incompleteness of a six-minute song—although the model suggests this concern is misplaced.
Using listening duration data from Echo NestAnd mapping this to a three-month sample of consumption of the top 15,000 songs on UK streaming services, Will Page’s analysis shows that the effective share of revenue from incomplete streams is slightly smaller – 55% arrive 40% – Will increase the effective share of revenue awarded to completed flows by three percentage points to 58%.
What doesn’t change is the amount that streaming services pay to recorded music rights holders – this remains fixed (see below).
“I provide a model that turns theory into practice with simple inputs, variables, and outputs. You can’t control skips, but you can control how to punish them, and you can observe the impact on each stream,” Pei Strange saying
The numbers are directional, but they point to a viable alternative. The absolute impact is quite small, as surprisingly only about 10% of flows are skipped. The model also showed reassuringly that long songs were completed equally frequently as short songs—marathoners in marathon races and sprinters in sprint races.
We have been trapped for too long. Completion is a way to move forward.
You can read Will Page’s full proposal for finalizing music royalties here.
Sam Blake is a Brooklyn-based writer and editor. His work has appeared in The Economist, NPR, and the Detroit Jewish News, among other outlets.global music business
