A progressive streaming payout model uses an algorithm to decrease the value of streams in a given month as they accumulate, which allows us to start with a higher base per stream value, more than double the current average Spotify payout ($0.004). As plays accumulate, they're valued less, & dip below the average Spotify payout after 30,893,281 plays at the default settings.

This model redistributes revenue downward from the top few hundred most streamed artists, & also upward from any artist who gets fewer than 250,000 streams per year (because Spotify doesn't supply data for earnings tiers below $1k/yr). And the result is more than doubling payouts for 272,550 artists.

Here's how it works...

Base play value: $0.0087

The base value uses data from Spotify's Loud & Clear Report to approximate real world numbers. Spotify provides data on the 274,000 artists who generated more than $1,000 in streaming revenue last year & lists their revenue brackets from $1k to $10m. From those payment figures, I extrapolated monthly streaming numbers based on a $0.004 per stream value. Then applied the curve to each bracket, getting a new, smaller "effective plays" number. Then I divided the monthly payout average (based on Spotify's $10b payout claim) by the monthly "effective plays" to reach the base value play. This math is important because the payout has to match the same revenue requirement set by the standard $0.004/stream calculation.

The data that led to these particular settings can be found on this Google spreadsheet.

Total plays for the pay period: 10,000,000 plays

This is the field you would update to see the payout for a given number of plays. This can be compared to the standard pro-rata model Spotify payout in the Results column. It defaults to 5,000,000 plays because this is the target plays for a band of 5 musicians to earn a minimum with a 20% royalty rate.

Curve duration: 50,000,000 plays

This defines the number after which an artist receives the floor rate for additional plays.

Floor value: 3% of base value

After 50,000,000 plays, the default algorithm pays out $0.000261. This vastly devalues ultra-high volume plays. For instance, Taylor Swift would only receive $808,882.50 for her 22.1b average streams per month, as opposed to $8,840,000.00 using the $0.004 metric. (This is an approximation because the model doesn't technically account for plays above 208m due to Spotify's generalized data.)

Base value plays: 500,000

This sets the first 500,000 plays to pay out at $0.0087, increasing the value of early streams, after which the curve begins to apply.

Curve exponent: 1.2

This defines how steeply the value of plays begin to drop off.

But why disqualify anyone under 250k annual streams from payouts?

This is due in part to the fact that Spotify doesn't supply data for earnings tiers below $1k/yr. But the goal is to consolidate Spotify royalties into meaningful payments, rather than consolation checks. Using a progressive payout model, many more artists would move into the $1k tier, but we don't have data on how many that would be.

But there's a bigger picture here than simply streaming revenue. If mid-tier artists double their earnings, an artist who doesn't qualify for the payout minimum might receive an advance or a bigger promotional budget from an independent record label whose station has been improved by the algorithm. This is a model that also trickles down.

Why penalize high volume streamers?

There's a phenomenon in capitalist society where, once you reach a certain amount of exposure, you become a magnet for more exposure. The media & the public have an incentive to, for instance, make a fuss over Sabrina Carpenter's album cover or Chappell Roan's political views, solely on the basis of their "relevance" at a given moment. Did Taylor Swift earn her Time Magazine Person of the Year award? Or did Time Magazine simply need her to sell the most amount of magazines?

The idea is that, past a certain point, exposure is less earned than it is simply collected. This algorithm suggests that point is the $5m/yr earnings tier.

Taylor Swift was streamed 26.6b times last year, which comes out to $106.4m at $0.004/play. And I don't personally believe that the disparity between her & other major artists who make less than $5m per year is due to talent or hard work. So the progressive payout model is the only one that makes sense to me.

Are these variables final?

I made all of the variables in this calculator editable because it's intended to start a dialogue on alternative models for paying artists. I set the default values to achieve the type of industry I'd like to see. But someone else may want to optimize the algorithm such that it doesn't so harshly penalize high volume streaming artists, or they may want to extend the base value payouts beyond 500,000 plays. They may want to lower the base play value in order to qualify more artists for payouts. In any event, this calculator will allow you to see what that can look like.

What's the point of this? The Spotify & the major labels & artists would never agree to this.

If you view the spreadsheet with more detailed data, only 210 artists lose money, but 273,790 gain money, most doubling their earnings. I believe that this payout model makes a better music industry for everyone. An industry where wealth is more widely distributed produces more studios, better producers & engineers, more tours, more instrument shops, better studio musician rates, more mid-tier labels who can support more new artists, etc. Even artists that don't qualify for payouts may receive an advance or a bigger promotional budget from an indie label, instead, making them more likely to qualify for payouts at a higher rate thereafter.

Because of the secondary effects of an equitable streaming economy, everyone in the music industry should be behind this, lobbying for federal legislation that takes streaming payouts out of the hands of Spotify and into a government organization, like SoundExchange, which distributes royalties from satellite & internet radio.