Streaming services (Spotify, Apple, etc.) calculate royalties for artists by putting all of the subscription revenue in one big pool. The services then take out 30% for themselves. The remaining 70% is set aside for royalties.
This giant bag of royalties is then divided by the overall number of streams (aka “plays” or “listens”). The result is called the “per-stream royalty rate”.
The problem lies in the fact that this “Big Pool method” only cares about one thing, and one thing only: the overall number of streams. It does not care even a tiny little bit about how many subscribers generated those streams.
This leads to clickfraud and several other scams.
Ashish Sinha
NextBigWhat
