The average payout for a stream on Spotify is estimated to be between $0.006 and $0.0084.
The average payout for a stream on Spotify is estimated to be between $0.006 and $0.0084. Anton Brand/Shutterstock

It’s no secret that royalty payments from streaming services are laughably nonexistent for anyone not named Beyoncé or Taylor Swift (and even then, there are complaints). In recent years, some musicians have attempted to bring attention to this fact, and in the process have been shamed and pooh-poohed by the people who rely on their music to get them through their work week but who apparently don't want to pay anything more than a few cents to do so.

Now at least one musician is proposing something concrete to do about it: Sharky Laguana (formerly of SF '90s indie rockers Creeper Lagoon, and current head of Sprinter van rental empire Bandago) wants you to stream your favorite independent bands 24/7 during the month of September. (Back in the late '90s/early aughts, his San Francisco band was on the verge of becoming the Next Big Thing, but that never happened. It wasn't because of streaming royalties.)

Here’s the problem as he sees it: Currently, musicians on sites such as Spotify are paid based on how many times their songs are streamed, and this money comes out of a large pool of subscriber fees. This system, Laguana argues, unfairly benefits artists who have fans who listen to the same song every day all day, and also is susceptible to hacks and fraud. It also means that a substantial share of a subscriber’s fee ends up going not to the artist who they listen to but to the artist who has more streams.

This is why the average payout for a stream to labels and publishers is estimated to be between $0.006 and $0.0084.

Here’s how he thinks Spotify should pay musicians instead: Through a model called subscriber share. He explains how your $10 per month subscriber fee would be divvied up (30 percent of it, or $3, automatically goes directly to Spotify):

The premise behind Subscriber Share is simple: the only artists that should receive your money are the artists you listen to. Subscriber Share simply divides up your $7 based on how much time you spend listening to each artist. So if you listen to an artist exclusively, then that artist will get the entire $7, but if you listen less they get proportionately less.


Sounds like a more logical plan, right? But how to make Spotify change its policies? That’s where his idea for continuous streaming all month long comes in.

Here's how he thinks the tactic will work:

...[I]f these silent protestors streamed strictly independent artists, major labels would have to worry about the value of their streams decreasing! That could be enough to persuade them to reconsider the use of the Big Pool method, and if the major labels jump out of the Big Pool tree, the rest of the music industry will follow.

This is where Laguana's argument gets a bit shaky. First of all, a band already tried a similar silent streaming hack (and failed). Although Laguana's proposal is much wider and potentially less harder to monitor than that, it's not impossible. (To avoid getting caught, Laguana recommends that you turn the volume low, but not all the way to zero, and to change artists periodically so that you aren’t mistaken as a bot.) I'm not sure if Spotify is on to this new hack (although I contacted Spotify for a response so they are now) but I'm certain that they will squash any attempt at gaming their system.

But even if Spotify was unable to foil the hack, it seems doubtful that the music industry would be threatened by a potential small dip in revenue for a month. (Struggling though it may be, the major label industry is still a behemoth.) Let's look at the numbers:

Digital revenue constitutes about half (46 percent) of the record industry's total revenue ($6.85 billion in 2014), and within that, royalties from subscription services and ad-supported streaming services make up about 32 percent, or about $1 billion, of that number (although it continues to grow). Downloads make up the bulk of the industry's digital revenue.

How much potential money are we talking about here? Spotify says it has about 20 million paid subscribers who pay that $10 per month fee (55 million users have free accounts). That's $200 million in monthly subscription fees, of which 30 percent (or $60 million) goes to Spotify. That leaves $140 million monthly (or $1.68 billion annually) to pay out to musicians and their record labels.

That's nothing to sneeze at, clearly, but it still represents a small percentage of the music industry's overall revenue. Even if Laguana's proposal managed to completely obliterate the music industry's total streaming royalty payments for the entire month of September, we're still only talking about messing with 2 percent of its annual revenue. (And that's assuming all the streaming revenue comes from Spotify.)

It's clear that streaming royalties aren't sustainable for the vast majority of musicians, and that something needs to change. While I don't think Laguana's method of changing it will be effective, maybe the effort will at least communicate the message a bit louder. Hopefully, Spotify is listening.