[Self] The revenue from the $10 you pay for your music streaming service does not get distributed among the artists you listen to. If it got distributed to the artists you listened to, the artists you are loyal to would receive much greater compensation from the streaming service.

I verified the math using my own assumptions starting with 1000 subscribers that generate $10 per subscriber per month ($10,000 per month). I assumed that 900 of those users streamed 2000 songs per month, and listened to artist “A” 80% of the time and artist “B” 20% of the time, the other 100 users streamed 200 songs per month and only listened to artist “B”.

The current method calculates the revenue distributed to arts "A" and "B" as a ratio of the number of streams to the total number of streams. This method pays a monthly sum of:

  • $9,988.90 to artist “A”
  • $11.10 to artist “B”

If the revenue from the money each user payed for a subscription got distributed among the artists the individual subscriber listened to, this method would pay out a monthly sum of:

  • $7,200 to artist “A”
  • $2,800 to artist “B”
/r/theydidthemath Thread Link - medium.com