User-centric settlement for streaming?

Arnt Maasø, Associate professor, University of Oslo, Norway

OutlinePhysical era vs. streaming era Challenges for artists and music business Results from research on user-centric settlement

The era of physical units

Artist received a !direct share of !

a fan’s purchase

My streamsYour streams

Example

100 streams1000 streams

SUM: 1100 streams

‘Pro rata share’ = personal streams !divided by total sum of streams

=1000/1100 =100/1100

Pro rata model

100 streams1000 streams

Pro rata model

=1000/1100 =100/1100

90,9%

=1000/1100 =100/1100

100 streams1000 streams

9,1%

Pro rata model

User-Centric model

50% 50%Shared between the artists

Miriam listens toShared between the artists

Arnt listens to

User-Centric model

Challenges with existing model?

Economic disconnect between fans and artists Favors ‘quantitative’ usage Niche artists with niche audience may struggle May inhibit innovation

Results from one sample month (August 2013 + 2012)

All streams by all anonymized users of

WiMP Music in Norway

Share labelsUniversal

Sony Music

WMG & EMI

Phonofile

Other

Share of revenue August 2013

Pro rata model User-centric model

Market share inferred from the model, and not based on actual information about price tiers or price-per-stream.

Artists: cumulative shareC

umul

ativ

e sh

are

20 %

40 %

60 %

80 %

Top 5000 streamed artists August 201310 100 500 1000 5000

8,5 %

34,1 %

60,1 %70,8 %

89,7 %

7,6 %

31,8 %

58,3 %69,4 %

89,2 %Pro rata modelUser-centric model

Cum

ulat

ive

shar

e

0 %

20 %

40 %

60 %

80 %

Top 5000 streamed artists August 2012 and August 2013

10 100 500 1000 5000

89,1 %

69,2 %58 %

31,6 %7,9 %

88,2 %70,4 %

59,7 %

34,5 %

9,4 %

User-Centric 2012User-Centric 2013

Comparison 2012-2013

Note: The data in the 2012-2013 comparison here are filtered for users with more than 100 streams. Data for all other figures are with all users with more than one stream.

Share of revenue local artists

Cum

ulat

ive

shar

e

10 %

20 %

30 %

Local artists among top 5000 artists10 100 500 1000 5000

2,7 %

11,1 %

19,0 %21,5 %

25,4 %

1,6 %

9,3 %

16,4 %18,6 %

22,5 %

Pro rata modelUser-centric model

International!70,9 %

29,1 %

User-centered model favors local artists

13% !increase

* Percentages here are of the top 5000 artists (accounting for near 90% of all streams), tagged

with nationality

International!74,2 %

25,8 %Pro rata model User-centric model

User-centered model favors local artists

WiMP Passion indexSt

ream

ing

in h

ours

Number of users

* LOW passion

* HIGH passion

Passion index and user-centered model

31 of 100 top artists on the passion index are local 8 of these have significantly more (5-800%) streaming by fans in a 30 km radius from where they are from Almost all artists with high passion index benefit from a user-centric model Highlights the importance of developing close fan-artist relations

Fair for artists - fair for fans?May this be an incentive for labels to develop local talent?

Added incentive for artists to connect with local fans?

Increase legitimacy for streaming services?

Thank you!

www.cloudsandconcerts.comArnt Maasø, University of Oslo <arnt.maaso@media.uio.no>

Arnt MaasøXin Jian Ola Løvholm

The Clouds & Concerts research project involves: Anne Danielsen (project leader, U of Oslo), Arnt Maasø (project leader, U of Oslo), Yngvar Kjus (post doctor), Anja Nylund Hagen (PhD), Marika Lüders, (researcher, SINTEF), Beathe Due, Johannes Bjelland, Kenth Engø-Monsen, Pål Roe Sundsøy Wenche Nag (Researchers, Telenor Group), Research assistants: Ola Løvholm, Xin Jian, Marc Casanovas, Linn Jakhelln, Gro Kirkeby, Erik N. Strutz, Hanne Tråsdahl, Ragnhild Toldnes, Inger Helseth, Helena Zarifa Pedersen.

#sxstreaming

Panel discussion

Kjartan Slette!Head of strategy!

WiMP Music

Arnt Maasø!Assoc. professor!

Univ. of Oslo

Hedvig Mollestad!Thomassen!

Artist

Moderator: Inger Elise Mey!Director TONO

Trond Tornes!Marketing Dir.!

Phonofile

#sxstreaming