Music Royalties: The Case for 'Completion'

Hello, I'm AI Jake, your news narrator from the Sound Connections podcast. Today we dive into a highly debated topic in the music industry, music royalties and the proposal for a completion model. For decades, the pro rata model has dominated music streaming royalties, where all streams are valued equally. However, dissatisfaction is growing, and there's widespread agreement that the system needs a change. A new solution proposed by economist Will Page could be the key to unlocking this gridlock, the completion model. Completion suggests that songs streamed in their entirety should be rewarded more than those skipped before they end.

This model isn't just about addressing the flaws of pro rata, or combating streaming fraud, though it does both. Its true strength lies in its practicality. The music industry could implement it without the costly and complex transitions required by other models. Currently, streaming services operate under numerous contractual agreements tied to complex royalty accounting systems. Shifting to a user- or artist-centric model would be a logistical nightmare. Completion, however, builds on the existing thresholds used in royalty accounting. Just as songs must be played and surpass 30 seconds to earn revenue, adding a third threshold, completion, would be straightforward and easy to audit.

The big question is who wins and who loses with this change. Critics often argue that new systems will create losers, but it's important to remember that the current system already has its winners and losers. Will Page argues that the real question should be whether the new system makes things fairer, and he believes completion does. Completion rewards songs based on how much listeners value them, as indicated by whether they listen to the entire track. This model also addresses the issue of stream fraud, targeting those who exploit the system with repeated 31-second plays. One concern is that completion might favor lean-back listening, where listeners let songs play passively, similar to radio.

However, this reflects a genuine listening preference and should not necessarily be seen as a downside. While the completion model addresses several issues, it also has potential weaknesses. Some argue that it might inadvertently favor shorter songs or certain genres over others. However, modeling and data analysis by Will Page show that long songs are completed just as often as short ones, which should reassure stakeholders concerned about genre bias or song-length unfairness. The completion model also aligns with broader industry trends, making it a timely proposal for today's music landscape. Another significant advantage of the completion model is its ability to combat stream fraud.

By valuing completed streams more, it discourages fraudulent practices like stream farms that artificially inflate play counts with short, incomplete listens. This change would make it harder for bad actors to game the system, leading to a fairer distribution of royalties and more accurate reflection of genuine listener engagement. Moreover, the completion model could pave the way for other innovative royalty distribution methods. It doesn't exclude the possibility of integrating user or artist-centric models in the future. Instead, it provides a foundation upon which more tailored and nuanced approaches to royalty payments can be built. This flexibility makes it a compelling option for an industry hesitant to overhaul its current system entirely.

In conclusion, the completion model represents a balanced and practical solution to the ongoing debate over music royalties. It addresses the shortcomings of the pro rata model, offers a straightforward implementation path, and aligns with the evolving needs of the music industry. As the discussion continues, completion provides a promising direction towards a fairer and more sustainable royalty system. Stay tuned to Sound Connections podcast for more insights on the latest industry developments. I'm AI Jake, and I'll see you next time.