A Fairer Way to Share Subscription Revenue

Resources

A collection of articles and resources on this novel approach to sharing subscription revenue among third party contributors.

How to make streaming royalties fair(er)

“Let’s reward artists who actually bring in and sustain revenue, not artists who simply have listeners more likely to listen to the same tracks repeatedly.”

Sharky Laguna

User Centric Licensing: Making Streaming Work For Everyone

“We need to explore all ways of ensuring revenues are distributed on as equitable a basis as possible. Under a user centric model an artist would get paid based on the share of an individual’s listening.”

Mark Mulligan

Streaming music is ripping you off

“If you subscribe to a subscription music service such as Spotify or Apple Music (…) you probably believe your money goes to the artists you listen to. Unfortunately, you are wrong.”

Sharky Laguna

Throw Out the Big Pot: Streaming Pay

“If a subscription service simply aggregates all the activity on its entire platform and then pays out pro rata against it, the winners will always be the larger players.”

Jeremy Silver

What would user-centric streaming payouts really mean for artists?

Could Spotify and other music streaming services answer their musician critics by changing the way they calculate their payouts? The debate about whether these companies should switch to a “user-centric” model is growing in volume…

Stuart Dredge

A better way to cut a cake and eat it too

The current streaming model is broken, in the sense that there is no direct link between artist and fans in an economic sense. This is due to the way subscription fees are divided in the current pro rata model…

Arnt Maasø

Subscriber Share: Why we use it for contributor payouts

For our new graphic asset subscription  Envato Elements ,  we had an important choice. Should we stick with the traditional ‘big pool’ method? Or try to pioneer ‘subscriber share’ at scale?

Xavier Russo

What is Subscriber Share?

A quick explanation of what it's all about
It's a fairer way to share revenue.

Each subscriber's money goes only to the content they actually use.

Subscriber share is an alternative way to share revenue from a subscription with content creators. Also called "user-centric payouts", the idea came from music streaming but is relevant to any subscription that gives access to content from third-party contributors.

Subscriber share challenges the traditional "big pool" (or pro-rata) method. With big pool, the revenue share is pooled, and divided among contributors based on total usage: i.e. more downloads or plays = more money.

However, big pool has been criticised for not supporting independent artists. To earn decent money, you need a massive volume of usage. Critics also argue that the pro-rata method is skewed by the preferences of heavy users over light ones, and is vulnerable to click fraud.

Subscriber share is more complex but arguably fairer to independent artists & creators. The core idea is that a subscriber's money goes only to the contributors they actually use. No subscriber subsidizes anyone else. And if you only use one artist, they get all your revenue share.

Subscriber share aligns a creator's incentives with where the money comes from: i.e. attracting & retaining paying subscribers. They can boost earnings in several ways: serve a small niche with unique content, or go for mass appeal. The key thing is to keep paying subscribers happy.

Subscriber share is still very new and relatively unproven. But as subscriber share pioneers demonstrate that it is feasible, broader adoption is likely to occur.

  • Fair to Contributors
  • Aligns Incentives
  • Simple to Implement
  • Commonly Used

Who's Using it?

These are brands who have stated publicly they use a version of Subscriber Share or User-Centric Payouts
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Envato Elements


Digital assets subscription for designers, agencies and marketers. Pays contributors 50% of net revenue using subscriber share.

elements.envato.com

Aimed at designers, agencies and marketers, Envato Elements is an unlimited subscription for graphic design assets. It uses subscriber share to allocate 50% of net revenue to contributors. Owned by Envato, a community-focused company in Australia that runs digital marketplaces.
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Baboom


Online music streaming service with “Fair Trade Streaming”. Subscription fees go from the fans directly to artists they stream.

baboom.com

BABOOM uses a “Fair Trade Streaming” model. This offers the artist full visibility of payments from streaming and ensures subscription fees go from the fan directly to the artists they stream. Revenue commission ranges from 70% to 90%.

Suggestions?

Did you find other articles or resources that are relevant? Know of another brand using subscriber share? Let us know!