Royalty Math, Demystified: Pro-Rata vs User-Centric vs Artist-Centric

Streaming royalties are one of the most confusing topics in the modern music business. Ask ten artists how they think they’re paid, and you’ll get ten different answers (plus at least one conspiracy theory). The truth is: it’s not rocket science, but the math behind payouts can make or break your career.

Let’s break down the three main models — Pro-Rata, User-Centric, and Artist-Centric — in plain English, so you know where your streams are really going.

1. The Pro-Rata Model (a.k.a. “The Pool Party”)

This is the default system used by most DSPs (Spotify, Apple Music, Amazon Music, etc.).

• All subscription + ad revenue goes into one big pot each month.

• DSP takes its cut (about 30%).

• The rest is distributed based on share of total streams across the platform.

Example:

• Spotify makes $100M in a month.

• After their cut, $70M is left for rights holders.

• If your song got 1% of all streams that month, you get 1% of the pot = $700K.

👉 Problem: If a listener only plays your track, but Drake had 5% of global streams, some of that fan’s subscription money is going to Drake. It rewards popularity over loyalty.

2. The User-Centric Model (a.k.a. “Follow the Fan”)

Deezer, SoundCloud, and a few others have experimented with this.

• Each listener’s subscription fee is divided only among the artists they streamed that month.

• If you pay $10 and only listen to indie bands, your $10 (minus DSP cut) goes directly to those artists — not to the global pool.

Example:

• Marissa listens to you 100% of the time.

• Her $10 subscription = $7 to you after platform cut.

• No Drake tax.

👉 Benefit: Fairer for niche and independent artists.
👉 Challenge: Harder for DSPs to implement at scale, plus big labels lobby against it.

3. The Artist-Centric Model (a.k.a. “The Middle Ground”)

This is the newest trend — being piloted by Universal, Deezer, and others.

• Designed to prioritize “real” artist streams over background noise, bots, or white noise playlists.

• Streams are weighted differently: e.g.

  • Active fans (searching for you, saving your songs) = full value.

  • Passive background listens (e.g., 8-hour lo-fi playlists) = reduced value.

  • Suspected bot activity = zero value.

Example:

• 1,000 active searches for your band might pay more than 10,000 random passive plays on a study playlist.

👉 Benefit: Rewards engagement and fandom, not just volume.
👉 Criticism: Still vague, and DSPs/labels decide the weighting system.

So Which Model Wins?

• Pro-Rata = great if you’re a superstar, rough if you’re indie.

• User-Centric = fan loyalty finally matters.

• Artist-Centric = designed to kill fraud and reward “real” artists, but execution matters.

The reality? We may see hybrid systems: Pro-Rata as the base, with Artist-Centric rules layered on top, and User-Centric models offered as “fan-first” experiments.

Why You Should Care (Even If You’re Just Starting Out)

Because these models change how your streams convert to dollars. If you’re building a career, understanding this math helps you:

• Forecast income (don’t just trust the monthly distro statement).

• Decide which platforms to prioritize.

• Educate your fans: “Hey, if you stream me on [platform X], more of your subscription goes to me.”

Your fans want to support you. Make it easy for them to understand where their money goes.

The Bottom Line

Streaming royalties are complicated, but not impossible. Pro-Rata, User-Centric, and Artist-Centric models are just different ways of slicing the same pie. The real question is: who do you want eating with you?

And here’s the kicker: no matter the system, your best strategy is still the same — build direct fan relationships, grow loyalty, and diversify income streams (merch, tickets, Patreon, syncs). Streaming should be the spark, not the fire.

Download the Royalty Model Cheat Sheet