Help me understand the math. If the revenue is divided up by the label according to percent of streams the artist has, isn’t that still basically the same as an artist being paid a rate per stream? Just that ppl with the same # of streams at different labels may be earning different rates depending on who else is on their label? So in that case wouldn’t it be *good* to be at the same label as someone like Drake? I’m confused.
The short answer is yes, it’s better for a streaming artist to be on a major, who can negotiate favorable rates for their artists.
As best I understand it, let’s say you are Zayn, at #116 currently and at a Sony imprint label the same as Drake at #2. Let’s say that all Sony artists got 100 streams for the month of July (for math simplicity) and that Drake at #2 is going to get paid for 50 of those streams, because he accounted for 50% of Sony’s streams in July. Zayn, at #116, will get paid for 8 of those streams, because he accounted for 8% of the total (for illustration purposes only since I have no idea what his percentage would be). The better Drake does, the lower the percentage Zayn and all other artists get. Let’s say Drake has a huge single and in July he gets 60% of the Sony pot. There’s a smaller pot for all the other artists to divvy up. It isn’t unfair, at least in theory, because Drake got all those streams for his new single. But it means that my Zayn streaming as an individual consumer means nothing, since he doesn’t get paid by his streams but rather by his percentage of the total. There’s no one to one correspondence between my streams and Zayn’s paycheck, because all the streams go into the same Sony pot. The argument for transparency, as I understand it, is that artists get paid per stream, no matter who is on their label with them. Feel free to correct me.
It’s why Tom Gray says it’s good to be Ed Sheeran. You get paid first and most because your percentage of the total is higher, regardless of individual consumer behavior. I’d like the artists I stream, many of whom are not in the top 500, to get paid every time I listen to them regardless of how Drake or any other top streamer is doing. Does that make sense? I’m not good at math, but I get the idea of pots of money and getting paid based on the total pot.
