| tl;dr: Spotify performance royalties paid by PROs used to be fairer than other revenue streams, until independent labels + artists got screwed over by the major labels. ------ Story time. The streaming point values PRS for Music assigned to Spotify used to be higher per play value than many radio stations in the UK. Someone I worked with actually analysed all this and we were really surprised to discover it. Low Performing royalty revenues were not Spotify isn't paying money fairly to artists, rather Spotify knew exactly how many people streamed any given track and the royalty payout model paid based on % of total streams. So it was actually a fairer model -- if you assume number of streams is an indicator of performance copyright value. Compared this to the Radio model. A typical track played on BBC Radio could earn something like £80 for one play (depending on the time of day and the station). But that was because radio audience figures were estimated from sample data for the entire nation. And those samples changed something like every 1-2 years. 10 people in the country might actually be listening to the station at the time -- but you'd still get £80 regardless. Of course the actual total license value then becomes the big point of issue -- was Spotify being charged enough...? EMI, Sony, Warner et al. all thought no. They went and cut their own deals with Spotify. Not only was their music being treated as equal to everyone else (they didn't like that), they thought they could get a larger license revenue by dealing with Spotify directly. So the we ended up in this really weird position: PRS for Music wasn't licensing the majority of UK royalty revenue from Spotify (the majors were) but PRS did all the processing for them (eventually GEMA took over). Leaving PRS for Music with the same workload and less bargaining power during license negotiations. I bet you all £10 in my wallet that the artists Ek referred to as "happy" were on those major labels' rosters. ------ Source: I used to work for PRS doing usage level data analysis. Note 1: This was correct as of 5 years ago, certain things may have changed recently. Note 2: I'm only talking about the Performing copyright. I stayed the hell away from the mess that was Mechanical rights as much as possible. PRO: Performing Rights Organsiation streaming point values: 1pt = 1 stream for Spotify. 1pt = 1 second of music on Radio. royalty payout model: total points in a quarter * point value = total available license revenue for the quarter |