Alternative payment models in the music streaming market: A comparative approach based on stream-level data

•We study in a comparative static approach the consequences of implementing either a user-centric payment system or an artist-centric payment system in the music streaming market instead of the current “pro-rata” payment system.•We use data provided by a leading music streaming platform in France from >150,000 unique users for one year (890 million streams).•We show that urban music songs, frontline songs (new releases) and songs from both the superstars and the deep tail (least popular artists) would be the most negatively impacted by a user-centric payment system while the changes induced by an artist-centric payment system would be much more limited. Contrary to its objective, an artist-centric payment system does not significantly improve remuneration to professional artists. Music streaming platforms’ models for sharing revenues with content providers have been the subject of intense debate for nearly a decade. The dominating model involves pooling platform revenues and allocating these funds to songs based on a song's share of the total number of platform streams. Since this model has several controversial consequences, alternative models have been proposed. This paper uses a novel approach to assess the two most discussed models – the “user-centric” and the “artist-centric”. Our approach relies on a unique data set of 154,505 streaming platform users (890 million streams) and simulates how a large-scale implementation of these models may reallocate revenues across different songs and rightsholders. We disentangle the static effects of a transition to a “user-centric” or an “artist-centric” model across each of six different song characteristics. We then compare the results of the two models. We show that contrary to its objective, an artist-centric payment system does not significantly improve remuneration to professional artists while the user-centric payment system would generate more significant changes in revenue reallocation, mainly at the expense of Rap & Hip-hop songs, superstars and new releases. Finally, we analyze the positions of the various stakeholders with regard to each of them.