Streaming's model is broken
PLUS: How to stand out, Vulfpeck's Sleepify campaign & the 1st major music AI partnership
Welcome, artists & builders.
Each week, I cover new tools & strategies to form better connected audiences. Today we get into streaming’s payout model & how to stand out.
Also, I’m adding a segment called ‘Good Advice’, where someone I respect drops helpful knowledge. LMK if I should keep it coming.
Inside Edition #10
💡 Context: Streaming’s model is broken
🗒️ Good Advice: How to stand out from the noise
🦁 In the Wild: How Vulfpeck gamed the system with Sleepify
🗞️ What You Missed: UMG x Endel AI, Web3 news & more
Streaming’s Payout Model Is Broken
Pro-rata is done. It's over.
Too many songs. Too much fraud. Too little truth between where fans think their money goes & reality.
120k added per day
30 seconds minimum to earn a royalty
And these numbers are about to look tiny. Hell, 14m tracks were created by Boomy users in just the last 2 years. We all know what’s coming.
But the big stat?
10% of streams are frauds. Ten percent! That’s $1.75 billion per year going to stream farmers rather than artists. Unacceptable.
We all know AI only makes this harder. How do we counter that? More AI, of course.
AI to create songs
AI to stream them
AI to detect the fraud
Or - and hear me out here - just change the payout model to stop these bad incentives (fraud) & encourage good incentives (fandom).
Fan Powered Royalties
Pro-rata: (Aggregate revenue from all listeners) ÷ (total number of streams) = $ per stream. All streams go into a global pool.
Fan Powered: (Revenue from individual listener) x (% of time spent listening to particular songs) = $ towards songs. Artists get a share of payments from users that listen to them.
The model removes the incentive for fraud AND it gives artists more purpose to super-serve core audiences. Incentives matter.
Remove Fraud Incentive: The math won’t work. If the maximum your streams pay out is 70% of your subscription fee (the non-Spotify share), you can’t recover it by streaming your owned tracks.
Add Fandom Incentive: If a small number of people stream you a high share of their total, you’ll earn real money. Scale isn’t the only dominant measure. Depth enters the equation.
Streaming could become less discovery-only for artists with knock-on effects in how artists connect & create (less virality chasing).
This isn’t the only model, but it’s one that current leaders can most easily implement. And it sets a foundation of fan → artist payments that can be built upon.
It also just feels fair. We can at least make the default business model for artists feel decent.
The Streaming Fix
5 steps to enlightenment.
Raise Prices: Come on
Change Model: Fan Powered
Increase Royalty by Listen Time: In subscriptions the depletable resource is time
Add Fandom Upgrades: Subscribe to Artists, NFTs
Complimentary Layers: Social, Gamification, Immersion, Ownership
So, how can an artist break through all this noise? See below.
🗒️ GOOD ADVICE
How do you stand out?
New segment. 1 question with 1 wise music pro.
Who: Jamie Coletta. Incredible music PR & manager.
The Question: How do you stand out?
I share these sentiments. And they show up in our next section.
🦁 IN THE WILD
Gaming the System
Almost 10 years ago, Vulfpeck exposed Spotify’s payout system in a genius move that grew their fandom & lore.
Here’s how Sleepify worked:
Silent Album: Vulpeck released an album of 10 silent, 30 second tracks. Just long enough to earn a royalty.
Fan Involvement: If you listen all night on repeat, you generate $4.
Free Tour: They would fund a free tour routed to where it streamed the most.
How did it work out? It received 5.5 million streams & $20,000 in royalties in the first 7 weeks before Spotify removed it. But these numbers can’t quantify the impact.
Word-of-mouth was off the charts. Spotify’s takedown only helped. “Did you hear about this band that released a silent album?”
It further cemented their brand & personality. This was in line with who they were as a band. Funny. Cheeky. Smart, but irreverent. Fans were in on the joke. They were creating a club.
They then put on a free tour in 250 cap rooms in 6 major US markets. They even played Sleepify in full during each show.
9 years later: Vulfpeck is selling out Madison Square Garden as an independent funk band, but our streaming payout model hasn’t changed one bit.
🧠 Your marketing can be a natural extension of your art if you cultivate a genuine identity.
🗞️ What You Missed
This is the 1st major generative AI partnership. Here’s why:
→ It’s safe & artist driven.
→ Gives extra life to releases.
→ Taps the growing functional music market.
→ Leverages artist branding without risk of too closely mimicking the artist.
🤖 Music x AI
Tencent is launching AI tools to help reduce the barrier to music creation.
1st song by an AI singer to be streamed over 100m times
Spotify may use AI to make host-read podcast ads.
Pnau, Bebe Rexha & Ozuna drop AI-based music video.
OpenAI CEO Sam Altman discusses music during congress hearing…and wasn’t aware of Soundexchange
⚒️ Artist Tools
How was this week's email?
Talk next week.