The record industry has completely disconnected the relationship between artists and their fans whereby the artists catalog is now an aggregated asset to leverage (the label’s) equity in a tech start up that is subsidized by musicians. Not cool.
This is an excellent piece by Sharky Laguna that looks at how all models utilizing divisible revenue pools are fundamentally unfair to the relationship between the artist and the fan. In short, the plays by each consumer should be compensating ONLY the artists that, that person plays (makes sense, right?). Further more 100% of the consumers subscription fee should only pay the artists that individual listens too – no matter how few or how many plays the consumer gives each artist.
Under this proposed revised accounting method, each consumer is once again reconnected directly to the artists they chose to support. This is exactly the kind of thinking that should be happening at the labels and music tech companies.
In a nutshell: Royalties should be paid based on subscriber share, not overall play share.
If I pay $10 and during that month I listen exclusively to Butchers Of The Final Frontier, then that band should get 100% of the royalties. I didn’t listen to anyone else, so no one else should get a share of the $7 that will be paid out as royalties from my subscription fee.
Please read the full post at MEDIUM:
https://medium.com/@sharkyl/how-to-make-streaming-royalties-fair-er-8b38cd862f66
The Trichordist 
I love the idea but nothin’ from nothin leaves nothin. Still, a great idea, just way better rates.
I do a lot of digital strategy work for labels, and for artists, and have been pushing this idea on social media and in newsgroups such as Pho for at least a year and a half, along with several others. So agreed, Sharkey’s well-reasoned presentation looking at the streaming model and discussing 2.0 versions of compensation models is useful and should be happening at labels…and it is, in many quarters. There’s an interesting article that you might want to look at, that highlights some actual numbers-based research on utilizing this very model on data from the WIMP streaming music service: http://www.koda.dk/fileadmin/user_upload/docs/Analysis_Music-Streaming-In-Denmark_2014.pdf
I have thought this for quite some time. based on my listening habits this would help many indie artists, night now its not though unfortunately.