I like David. He’s smart. But he misses the fundamental problem with streaming. It doesn’t matter that in aggregate more money is (lately) going to rights holders. The problem is it’s going to mostly the top artists and labels. This is a function of flat rate per stream 1/x https://twitter.com/dmacias37206/status/1321208507958480901

In the regular economy niche market product are more expensive than mass market products. Why? Niche market products have to spread fixed costs over fewer units. Mass market products are cheaper per unit because they can spread fixed costs over more units. 2/x

So pop hits should cost less per stream because they fixed recording and marketing costs are spread over hundreds of millions of streams. A niche artist should cost more per stream because there are fewer streams to spread recording costs (including ones on time and labor)... 3/x

...over fewer streams. So the counter argument I hear is, “most physical albums cost the same amount.” While that is partially true - jazz labels didn’t deeply discount while pop rock albums were deeply discounted at chains- that is not a flat price per listen. 4/x

When you paid for physical album you paid for all the listens up front. And on every single track on the album. So consider my purchase of Ornette Coleman’s Science Fiction on high quality vinyl for $16 in 1981. Don’t regret buying that album but only listened to it 10 times? 5/x

Consider now Rolling Stones Some Girls. (you thought I would say sticky fingers?) I’ve listened to that album probably hundreds of times. I had the fancy deluxe cover but it was still $7.99 in 1977. Essentially I paid much much less per listen for the mainstream song. 6/x

You may laugh at this as some sort of technicality but you shouldn’t. It’s literally the main reason that there is virtually no music middle class anymore. I also should point you to my experiences with my bands @TheBandCracker and @CamperBeethoven because...7/x

The two bands stand on either side of the digital divide. Streaming royalties are too low to support recording activity for Camper Van Beethoven. But we can break even if sell physical. And keep it off streaming services. @TheBandCracker economics are different... 8/x

This band has several major radio hits that are still regularly streamed, playlisted and broadcast on radio. Streaming services essentially overpay us on our hits. 5 songs (out of 200) now generate 99% of all streaming revenue. Our niche products (deep tracks) underpaid. 9/x

Finally streaming pays more per stream when a streaming service’s listeners listen less. What? Yes in periods when there are no big hit pop albums, or Covid happens and people stream Netflix (not music) all day, artists get more we stream. That’s a fucked up financial incentive.

The streaming royalty being essentially a fixed pool, divided in a pro-rata per stream basis creates crazy incentives. For instance If the big three labels (80% + market share per stream) stopped releasing music, it would take years for their revenue to appreciably decline.