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XUser-Centric or Pro-Rata? SoundCloud Stirs the Debate over How to Equitably Pay Artists
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
SoundCloud is upending how musicians get paid on its platform, and some think it could lead to a new paradigm that provides better streaming deals for most artists.
The German company behind the platform that millions of musicians use to find their audience announced plans Tuesday for a new revenue model it's dubbing "fan-powered royalties."
It's a form of the often-debated but never-implemented "user-centric" payment system, which contrasts the dominant "pro-rata" model used by Spotify, Apple Music and others.
The move comes amid a broader debate over whether the economics of streaming are fair to musicians, who often earn as little as 13% of the money that streaming generates.
The gist of user-centric payment is that the money from a given user gets allocated directly to the artists whom that user listens to. Here's a simplified example: Say the money that comes in from user Tom is $10 per month (whether through advertising or subscription), and Tom splits all of his streams equally among three artists. At the end of the month, those three artists will equally split Tom's $10.
Pro-rata works differently. In that case, Tom's $10 gets pooled with the money that comes in from all users across the platform. At the end of the month, that pile of cash gets distributed to artists (more accurately, to rights holders) in proportion to the fraction of total streams across the platform that each artist saw over that month. So Tom's $10 gets split up into many tiny amounts, most of which go to artists he never listened to.
Critics say pro-rata models tend to favor bigger artists, especially those with a penchant for producing singles that make it into specific playlists.
Some industry observers argue the user-centric model could prove a better deal for the many musicians who aren't Beyonce-level superstars. SoundCloud said its new model will benefit independent artists with loyal fans.
Studies of the effects of user-centric models on leveling the playing field have broadly been inconclusive. Those studies have been limited, though, by low participation from rights holders, such as record labels, which are often reluctant to allow their tracks to be part of an experiment.
SoundCloud's move is a step toward a better understanding of the impact of a user-centric model. Yet it, too, will be limited. The new model will only apply to a subset of about 100,000 artists who use specific SoundCloud features, according to reporting from Music Ally. And compared to streaming giants like Spotify, Apple and Amazon, SoundCloud brings in substantially lower royalty payments on the whole.
Over the last several months the UK government has been interviewing industry stakeholders as part of a formal inquiry into whether streaming's business model is unfair to musicians and whether changes are necessary.
At the UK government panel last week, which featured representatives from Spotify, Apple and Amazon, all three companies expressed willingness to experiment with new models. They stressed, however, that doing so would require compliance with the wider industry, including record labels, who control most of the relevant copyrights. As a platform that mostly caters to independents, implementing a new approach is a relatively lighter lift for SoundCloud.
The new model will launch on April 1st–and there are no indications this is an April Fools' joke. Seriously.
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Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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TikTok Content Moderators Allege Emotional Distress
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Content moderators reviewing TikTok videos have experienced psychological distress after exposure to graphic content, Business Insider reported Thursday.
Current and former moderators employed by Telus International, a contractor used by Culver City-based video-sharing app for content moderation, told BI that they were often assigned long, consecutive shifts overseeing graphic content—including beheadings, child sexual abuse and self-harm—and that requests to be reassigned to less demanding roles were often denied.
TikTok’s parent company, Chinese tech firm ByteDance, uses artificial intelligence to filter and separate inappropriate content into various categories, with human moderators assigned to review the content within those categories. As TikTok’s platform has grown—it is currently the most downloaded app in the world—employees said they were pressured to keep pace with the increase in content and were often denied discretionary wellness breaks, according to BI.
Additionally, while ByteDance has an emergency response team tasked with handling videos reported to law enforcement, one employee told BI that neither that team nor TikTok’s wellness team provided support to the moderators who reported such content. A Telus International spokesperson told BI that its own wellness team supported moderators, who have the option to skip difficult content. Telus employees, however, told BI that skipping videos resulted in disciplinary citations.
In a lawsuit filed against ByteDance in December, former content moderator Candie Frazier alleged that her work resulted in post-traumatic stress disorder and symptoms of severe psychological distress. Two other content moderators have since filed a lawsuit with similar claims.
The lawsuits are part of the growing legal pressure facing TikTok. In California, a bill that would allow parents to sue social media companies for addicting their children to apps passed the State Assembly and awaits the State Senate. The company is also facing renewed pressure from federal regulators over data privacy issues.
TikTok has also been scrutinized for its corporate workplace culture—with severalemployees claiming they were pressured to work long hours and accommodate the schedule of ByteDance’s China office.
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Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Relativity Space Surpasses $1 Billion in Contracts, Inks New Deal with Satellite Maker OneWeb
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Rocket maker Relativity Space soared past a milestone today, surpassing $1 billion worth of contracts for launches on its 3D-printed Terran R rocket.
Long Beach-based Relativity agreed to a multi-launch agreement with broadband satellite maker OneWeb on June 30. CEO Tim Ellis posted on Twitter that following the deal, Relativity now had over $1.2 billion in binding launch contracts secured by five different customers — even though the startup still has yet to send a rocket to orbit.
Ellis called the deal a “huge vote of confidence and we can’t wait to deliver.”
Relativity aims to send the OneWeb satellites by 2025. The OneWeb launch could be one of the first commercial launches sent into space by the rocket maker’s reusable Terran R craft.
OneWeb was previously using Russian Soyuz rockets to launch, but sanctions imposed on Russia following its invasion of Ukraine forced it to look to other alternatives. Ellis told TechCrunch Relativity was already looking to court OneWeb as a customer before the war, though, noting the deal “has been in the works for quite some time.”
OneWeb wants its broadband service to be operational by 2023, and to do that it has to launch at least 648 satellites into orbit. Relativity has two rockets under construction – Terran 1 and Terran R.
The smaller Terran 1 rocket has already secured a $3 million contract to launch small satellites for the Department of Defense. The Terran 1 will make its first flight in a mission nicknamed “Good Luck, Have Fun” (GLHF) which is expected to take off this summer and won’t carry any payloads. Assuming the GLHF mission is a success, Relativity will then launch the DoD mission.
The Terran R is Relativity’s 95%-reusable rocket and its answer to competitor SpaceX’s Falcon 9, with which OneWeb is also launching payloads.
In an interview with ArsTechnica earlier this year, Ellis said the craft could take off as soon as 2024, though it’s still being built at Relativity’s 1 million-square-foot factory headquarters in Long Beach.
Last June Relativity raised a $650 million Series E funding round led by its backer Fidelity Management & Research. At that time, Ellis told dot.LA the Terran R rocket was still under development and added, “Ever since Relativity's early days in Y Combinator, we've planned to manufacture a large reusable rocket.”
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Goop’s Noora Raj Brown On Having the Hard Conversations That Make Change
Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.
Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.
On this week’s episode of the Behind Her Empire podcast, host Yasmin Nouri talks with the executive vice president of Gwyneth Paltrow’s Goop, Noora Raj Brown.
Brown started working at Goop when the company was still in the early, hectic stages, moving from a weekly newsletter Paltrow would send out to her friends to a multinational publishing and lifestyle brand.
At the time, Goop’s advice, guides and features about beauty style and wellness, were tackling difficult issues like divorce, sexuality and health in very personal terms.
“So much of what we do at Goop is to push conversations into the mainstream and to talk about things that, frankly, people don't always want to talk about,” she said. “And these are hard conversations, right?”
Brown, a daughter of immigrants, grew up in Silicon Valley and always considered herself a creative, even though her parents were hopeful she’d take a more conventional professional route. “It was like, very much medicine and tech, and I wasn't interested in either,” she says. Instead, her interest veered toward fashion.
After earning her degree, she moved to New York City to work at a fashion magazine called Details, where she got to learn quickly about how designers function and how garments are produced and promoted — but the job didn’t come easy.
“A lot of it was really like finding your path, feeling really lost for a long time. And I think I also had this idea that I would come to New York and I would start interviewing and get a job,” says Brown. “And that would sort of be it. And I didn't realize how insanely competitive it was.”
Brown moved on to work in talent PR where she organized photo shoots, coordinated the angles of stories and then at a fashion and style publication called InStyle during a time when it was in the process of being sold to a new owner.
“There was a feeling of like, you couldn't win,” Brown says. “You're operating from a place of fear; you're not able to be your best self, right?, and you're not able to produce your best work.”
In 2016, when Brown made her way to Goop, there was no in-house communications or legal team, no HR, piles of debt and, from Brown, terror. “I sort of felt like, I was the first line of defense for anything negative that happened to the business,” she says.
The experience left her feeling unqualified, but she said Paltrow’s confidence in her made Brown more confident in her own abilities.
“I think we all just need to give ourselves the benefit of the doubt a little bit,” she says.
Brown’s personal journey, in many ways, mirrored Goop’s mission to push unconventional conversations into the mainstream. Brown says Goop has faced some backlash for its stories, but she says she feels strongly that important topics shouldn't be taboo, and adds that it takes honesty and courage to make change.
“If you're really going to, as we say, [...] milk the shit out of life, you need to do that,” she says. “As I said, operating from a place of real pride, but also real bravery is super important.”
Engagement and Production Intern Jojo Macaluso contributed to this post.
Hear more of the Behind Her Empire podcast. Subscribe on Stitcher, Apple Podcasts, Spotify, iHeart Radioor wherever you get your podcasts.
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Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.
Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.
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