Building a fan economy with Fan-Powered Royalties
Music streaming has helped the music industry return to growth over the past decade, but many creators feel left behind. The streaming economy has reached a point where the creator remuneration gap can no longer be ignored. It is no secret that many music artists are dissatisfied with the relationship between the consumption of their music on streaming platforms and the income they receive from it. The system determining how artists get paid (as well as how much they get paid) from streaming has also been the subject of long debate. The traditional ‘pro-rata’ model brings all streaming income into one pot and then distributes it based on the artist’s (and associated rights holders’) share of total consumption. Furthermore, every stream receives equal weight, whether the consumer is a passive listener or a superfan. The unintended consequence is that the value of an artist’s fans has become a lower priority than the volume of streams that they are generating.[..]
Based on data comparing FPR pay-outs to what they would have been in pro-rata, we have examined the mechanism behind FPR and uncovered the foundation of a new fan economy that ‘corrects’ much of the inequity and misguided incentives under the pro-rata model. FPR presents opportunities for artists of all career stages to reimagine their relationship with their fanbases – especially their most loyal fans. Perhaps most important of all, we see FPR not as an end in itself, but the foundation stone for a new music business that is built around artists, their fans, and recognition and remuneration.
- The majority the sample that MIDiA analysed are currently in FPR are off under FPR than pro-rata
- FPR has more artists to move up higher income brackets, with a in artists earning over in period between April 2021 and 2022
- Artists want be able to find fans make a living from their instead of chasing fame and FPR has helped of artists fans earn more from their than pro-rata
- Artists who more under FPR received of income from their superfans (those contribute more than a month) a category that makes up their total audience
- FPR incentivises rewards artists who are not building but also monetising their
- Superstars with audience of over typically have smallest share of superfans, at FPR’s incentives, they have the opportunity to engage and grow superfans
- FPR rewards of fans, not quantity of catching out inauthentic bots and who are paid to repeatedly There is less incentive to the system’, thus facilitating authentic
- FPR’s greatest is the insight that it into artists’ biggest contributing fans, artists better monetise their fans navigate the industry-wide shift towards fragmentation. Unlocking deep fan insight up the opportunity to build fan-centred music economy that is on fandom and the audience’s contribution
Note: Throughout this report we refer to creators, artists and / or music artists – we use these terms interchangeably referring to all artists currently distributing their music on SoundCloud.
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