This is a very very long post, it’s a proposition I’ve been mulling over for some time because I wanted it to be complete and not just a hack, also I wanted it to be potentially complementary to whatever offer we might develop this year once S2O is a reality, that is, something that can be chosen as “another option”, which would look like choosing between “S2O subscription” or “S2O pay as I play”. As we’ll see both propositions have their pros and cons, and I think both benefit artists and consumers in their own ways.
Before adding more, I want to say that I’m aware this is not a proposition for 2022 and I’m not expecting anyone on the devteam to do any of this unless there are both funds to do it and a global consensus that this is worth pursuing. With the state of how things are right now, there are other priorities, and we should tackle these first.
However, I think it matters to start elaborating long term strategies right now. Would it just be to make sure we don’t want to do that, or so that we have something to show people when they say, “I don’t like pay as you play, what else have you got”, rather than to pretend they’re wrong to not like it because they didn’t understand it and should instead just like it.
Lastly, despite this post being excruciatingly long, it’s still at a proposition stage, meaning we can still improve on this, and this is meant as the starting point of a longer collective discussion about making the subscription model work in favor of artists and listeners alike, which is no small task and implies shifts in how we think of subscriptions and payouts, and I don’t expect to have found all answers to it in just a few paragraphs.
I feel it’s important to explain why I even took the time to come up with this, since I just expressed we have more urgent matters, and we need to allocate devtime to priorities right now, the biggest of them being able to already provide our first and fully featured offer in the form of S2O Pay as you Play as Resonate has advertised it since its inception in 2017. However it’s my belief that even doing this won’t be enough to reach some of our most ambitious goals and more precisely it won’t be enough to retain our existing/growing customer base. I’m fairly convinced that with the current system what will happen is most of the new customers won’t renew their credits once they’ve used them for several reasons and we’ll be left with another financial crisis once the current augmentation of our user base dries out again. So there was always in my mind the need for a longterm alternative.
But the other reason I started doing this is, I think, more interesting and exciting. It appeared to me while crunching the numbers using the S2O price calculator Stream2own pricing calculator and trying to find out exactly “how much Resonate is giving for the average price of a monthly Spotify subscription” that… we were actually providing a fairly decent offer comparatively if we were to, indeed, switch to a subscription. But that’s not the entire story. With pay as you play, we’re providing a fairly decent offer potentially, based on a certain assumed sets of user behaviors (fairly well assessed one though I’ll get back to the limits of it), which means that for some “pay as you play” will be a great service, actually a bargain, for others it’ll be a dreaded nightmare that’ll imply constantly checking for credit usage. This has been evoked multiple times, most recently in this topic :
Turns out it has a name and is a well-known fact, studied since decades.
There’s something to be said, still, of “pay as you play” even for the people who financially benefit from it in that it’s an out of control (or requiring constant checking) way to spend money, it isn’t a fixed and well-set average over the course of a year, it’s an erratic metric based on user patterns. And most people much prefer predictability over their spendings than uncertainty even if it means paying a slightly higher price, especially lower class, even though it’s far from being limited to them.
In this sense the current offer proposed by Resonate is an absolute example of an economic phenomenon commonly referred to as “taxi meter effect” and… a lot of people hate it. You can find infos about it in this study
But this article presents a good summerized version of the problem
So, it’s super critical I think to realize that if this model is not around more often for all the online services we see, it’s not necessarily because no one else but us thought about it, it might just be because the critical mass of people just do not want it and those who tried to offer it failed accordingly. Especially when our offer is particularly steep in the sense of taxi-meter effect since the price can ramp up exponentially in our case, imagine a taxi where the closer you get to home, the pricier every minute gets.
But there are even other absolutely valid concerns about pay as you play and the top up mechanism as expressed here for example
Which is why, while trying to figure out number based on all possible use cases of S2O Pay as you Play, I started to think “ok so how would this look if we were ACTUALLY providing that subscription offer, what would it mean for us, where would we lose money where would we win, what kind of product will it be, and how would those same patterns reward users and artists”. So I established a proposition, and started comparing.
Using the S2O price calculator 10€/Month gives us roughly:
2h of music per day for the “Average/Seasonal” kind of listener.
5h of music per day for the “Explorer” type (who only listens to new stuff a lot and use the service as a discovery platform)
1h of music per day for the “Collector Listener” type (who only listen to a handful of artists a few times).
So it’s not hard to see here that: The collector listener would be the great winner of moving to a subscription service (because he could basically spread the speed at which he starts “owning” thing more incrementally without having to be very careful about his listening behavior), the seasonal listener would most probably only gain peace of mind (ie. not having to think about how much they spend although they’re not actually getting a much better deal than they would get with the “pay as you play” version) and the explorer type is most likely actually spending more money on a subscription than with a pay as you play system (but that also implies the “ethical reward” is much higher because artists would get more money from him, I’ll get back to it with actual numbers).
However what all those types of “listeners” would immediately gain is adaptability, more precisely, the capacity to change listening patterns without taking a huge financial hit just because their music consumption has changed from one month or one week to another. But there’s more.
Because all of this is stuff we already know, since this is why subscription is so often coming back as a request/interrogation, what we don’t know is what it could look like for Resonate. So here’s my take on it.
I’m proposing that we offer what I’d call a “S2O subscription”. That is, a proposition that retains the defining features of S2O and integrates them in a subscription offer. It implies that instead of having a fixed, hard set pricing for each listen (0.002, 0.004, etc.), it’s an incremental (same formula as with credits if we want, an *2 factor each listen) percentage of your monthly subscription.
To conceive this offer, the first thing to do in my opinion is to set the baseline of the things we want to maintain on Resonate from the S2O offer, this way we can quickly spot what can become a problem, and what can help with a new system. The baseline services to keep in my view are :
Penny per stream (baseline of .01€/song past 45sec) through redistribution.
The cap on “money per song / per user”, which means after 1.1€/1.25$ the user doesn’t have to pay anymore. I’m not calling this “owning” yet, because we don’t offer downloads, but as soon as we will offer download, this will effectively mean people own their songs just like on S2O.
The exponential curve of value per listen.
And here what I’m doing is I’m taking what I love about S2O and Resonate, and I’m applying/using to answer and fix the two most known and usual shortcomings of the user centric model which are:
The more you listen the more the music is devalued ad infinitum (this is fixed by both having a minimum price per stream which is a garanty for artists they’ll never be devalued past that baseline AND by having an exponential price per listen which is a garanty for listeners that the bulk of their money go where they want it to no matter how many songs they’ve listened to)
It’s still a usual streaming service which means everything’s still on lease forever, you never own anything, and you just keep throwing money at the stuff you’re most familiar with and the rest of your discoveries get the crumbs. (This is fixed by puting a “fair cap” on how much a song/album can make per user, exactly like S2O pay as you play)
So what would a percentage mean in this scenario? Let’s circle back to our imaginary “Average” user, but before that :
I’ve made a new price calculator for my proposition so that you can easily compare and it’s easier to get a sense of how both work.
[price calculator Pay as you Play] Copy of Stream2Own Listener Calculator - Google Tabellen
[price calculator Subscription] SUBSCRIPTION Stream2Own Listener Calculator MONTHLY.xlsx - Google Tabellen
The current system gives that person 900 track to listen to monthly before hitting 9,9€, roughly 30 tracks a day, most of which discoveries, which they only ever (rarely) listen to up to 5 times max (that’s already a lot of assumptions but let’s roll with it).
This is a surprisingly OK number, since the recent annual study of streaming numbers is giving us estimates that put us in the ballpark of average music consumption :
Long story short: People listen to something around 2.6 hours of music per day which is around 53 songs a day. However, music listened to through paid streaming services which is the only metric we should care to compare ourselves to only account for 1/3 of weekly music listening. I say let’s be bold and consider our platform is aimed at diehard music enthusiasts and let’s up that number to 50% it’s still just 27 songs a day. So 30 tracks a day is putting us on the high end of daily music consumption with 57% of consumption through paid streaming, which is a nice place to start. (We’ll try out more extreme scenarios afterward but it’s good to start on a slightly above average one)
Now let’s say this Average scenario is the base for our Streaming Offer (I would personally prefer something like 12€ which would be us saying that music has value and that we don’t feel forced to align to Spotify, and would effectively mean 20% supplement in revenues for everybody, but for now let’s align).
S2O (pay as you play)
900 tracks / 9.9€ / 0.0022€ per discovery play / 9 plays to reach 1,25€ (this is fixed so I won’t add it later on
900 tracks / 10€ / 0.0024€ per discovery play / 9 plays to reach 1,25€
OK so this doesn’t change much of anything, now let’s imagine the scenarios that do.
Let’s get in trouble right away with this profile because in S2O terms it’s the higher priced listening pattern so let’s see how much we/artists are losing :
S20 (pay as you play)
900 tracks / 21€ (which “we’re hoping” gets converted into 15,70€ if enough songs are “owned” along the way, which isn’t garanteed)
900 tracks / 10€ / 0.0011€ per discovery play / around 11/12 plays, to reach 1,25€ (price after 9 listens > 0.58€).
Furthermore if we add in the “owned” songs along the way (which is a strength of S2O in either form), then it goes up to 0.0015€/track not that far off from the 0.0022€ we currently charge listeners, so not much more for us to cover to top it to 1 penny / stream.
Well you know what, for a use case that’s kind of supposed to really bring the whole subscription model down, I find that it keeps an extremely decent level of reward for everyone. Sure we lose the “9 play to reach 1,25€” but the “9” number was always arbitrary anyway, why not 8? why not 10? That artificial nature of that metric has been mentionned as recently as last week
The only meaningful thing is that artists reach that price much quicker by an order of magnitude, and we’re still very much in that ballpark with 11 or 12 plays, and we would still be with 15 or 16. Except we wouldn’t put the burden on the listener to pay for it in an artificially defined and immutable timeframe.
But there’s more crucial than that, and even better in my view. One thing we shouldn’t dismiss here is that in the “pay as you play” version, those numbers are imaginary, because we have no idea if a user, under the “Taxi Meter” pressure, would actually end up using their credits in a manner that really fits their listening pattern, one likely outcome is they’ll feel a strong need to “optimize” their listening pattern to garantee as many streams as possible, or just make sure they’re only spending their money on the rare stuff they trully adore and not the rest. In the sub model however, these are the actual numbers of the listening patterns because the user do not have to care about what they’re doing, we are doing the heavy lifting of crunching the numbers for them instead.
This is the most interesting point to me, as I think it’s where we’re touching the limit of the “pay as you play” model in favors of artists.
S20 (pay as you play)
900 tracks / 4€
900 tracks / 10€ / 0.0067€ per discovery play / 8 listens to reach 1,25€
The limit to me, is that the “pay as you play” model has an assumption, and this assumption is that all modes of listens are not equal in value. If I like to listen to new things a lot rather than old stuff I know, “pay as you play” considers for no logical reason, that I deserve to pay less than if I’m someone who just likes to listen to 5 albums over and over. There’s no “ethical” reason for that. If someone wants his 900 monthly songs to be globally new things, there’s no real reason that he should pay less for it than someone with a different listening pattern, the only reason for that is that there’s this pernicious notion in S2O that “the first listen has less value”, but that’s not true for every type of listener, as we see here. And I think that’s where the combination of S2O + Subscription really shines : Value is more genuinely ascribed to your listening pattern.
The Collector listeners only listens to new track to hunt the next music to obsess about, what has value TO HIM, are the few songs he finds and love. Well in the Subscription incremental model, most of the money spent by him that month (96% in fact), will be spent on songs he listened twice or more. Furthermore, 79% will go to the songs he listened to over 5 times, which will garanty he will own those more quickly.
The Explorer listener on the other hand isn’t so much into one artist in particular, he’s into music as a background, or music as a way to challenge himself with new stuff, or he just likes to roam through playlists. Whatever happens, he’s just not that dedicated to any artists : what he’s paying for is access to a global catalogue of song and variety. And again, that’s reflected in his subscription because all the songs listened to once or twice will get 61.7% of his monthly money, which will make for a much higher value for first and second listens because THAT is what this specific user values : discovering things for the first time.
Here Subscription with the addition of S2O seems to me like a much more fluid and ethical approach to pay as you play, where we say that user behavior determines value out of a fixed amount which represents the price of access to our catalogue, not us by fixing arbitrary pricings.
The second takeaway from this, is that in the subscription model, the small value of first listens for the collector listener is balanced by the much higher value of the explorer listener, a difference so high in fact (x4) that it puts the overall average of a song’s price at 0.0035€ which is better than the current average of 0.0022€ at Resonate, but also means that even if explorer are not the majority of listeners, just enough of them could have us around the same average of 0.0022€ which would make no difference in terms of how we want to finance our “Penny per stream” politics. This would of course need to be backed by data, because once again, I doubt the explorer listeners are that many, but we don’t need that many of them anyway, there are many other silver linings that make this a non-issue to me.
(and what they can do for us / what we can do for them)
The weirder side of user centric models (and this one doesn’t completely escape that) is that the less engaged someone is with the platform, the more artists get paid. That’s the basics of splitting a pie instead of adding to it (like “pay as you play” does), the more you split it the less everyone gets. This effectively means that if someone listens to, say, 8 tracks in a month, weirdly… he now owns them all (totally ok in terms of transaction though since he did pay 10€ which went to the artists, but still a bit odd ethically from user to user). We could rejoice that some lucky artists got a nice lottery ticket and made 1,25€ out of the blue, but clearly this is the system breaking and not being indicative of a user’s pattern and what he values on the platform anymore, it’s just random.
There are several things we could do, we could implement a fair “maximum” per play, or per first play at least (this way if someone just wants to go on the platform once or twice to listen to that one album they love and know and decide the money this month will go to that and it’s their 4th or 5th play, we won’t interfere), the rest of the money would go to the platform, or to ensure the baseline minimum of “penny per stream” for everybody else. If it happens often enough, or if, extreme case, someone just doesn’t use the platform for a month or several months, we could give the listener an automatic “supporter share” for having paid a certain amount without actually really using the platform (which looks like support to me).
Now the immediate objection to doing that is that we could envision a scenario where someone actively decides to only listen to someone or something once on purpose so that this artist gets the entirety of his monthly subscription. Here my position is that to avoid this type of hacky behavior which aims to kind of “trick” our algorithm, we should have features that allow to do just that instead so users have control, which brings me to some new propositions for this model that I’ll be addressing a bit later on (some of which could actually already be applied to the current S2O model and could solve a few issues).
But there’s another issue with user centric models; so far I have, for practical purposes, imagined “monthly” listener patterns, and user centric just assume they’re consistent over a year, but “a month” is yet another arbitrary metrics that doesn’t mean anything for a listener. Now what if there was an extraordinary month for a listener (or just, a typically busy month with a lot of releases like it can happen in September or January) where they discover say 5 or 10 albums they love and listen to just that on a loop, it means the value of those 10 albums to the listener won’t be quite reflected in the user’s payments because there was so many of them this month. But it gets worse if the next month, that listener only listen to a handful of songs he finds unexciting… then it means these songs will actually get more money from him than the music he got excited about the previous month, and he’ll be closer to owning them. That’s a huge issue with user centric (in S2O form or not in fact). So, my first idea will go to addressing that.
We could imagine, since the money flow itself would be regular and predictable, that some amount of what’s being spent isn’t immediately distributed by the end of each month to pay for this particular month listening pattern, but is instead sent to a “rolling months” (I’m envisioning a 3-months period as minimum to start having valuable insight on actual listening patterns but it could be more) money pool as a percentage of the monthly sub that’s always preserved (say 50%), and “corrects” the big month to month differences in listening patterns. This way if 5 albums have been listened to a lot in say January, and not much has been listened to in February, then part of the February money goes back to the music listened to more times in January. This would help avoid one of the biggest limitations of the User Centric model, and it would also mitigate the absurdity of owning songs you just haven’t listened to all that much just because of the arbitrary measurement of “monthly listens”. By mixing two different temporalities, we’re gaining in modularity and precision in establishing what the listeners enjoyed, and we’re giving them back a sense of agency in knowing that breaking their listening pattern won’t impact who gets the biggest share of their spendings.
What this effectively means is that, whereas someone would have needed to spend something like 30€ right away to listen to that music a lot over the course of January in a pay as you play model, in a rolling-month subscription model, something close to that same amount could be spread over time incrementally, benefiting from the variations in listening patterns rather than being impacted negatively by them.
This is actually an idea I had for the current version of S2O but it makes in my view just as much if not more sense in the subscription version: allow people to “top up” their listen counts (up to 9). This would solve two problems :
Long form music: you’ve listened to a track, it’s great, but it’s 20 minutes long and you won’t listen to it again > Top up that track with however many numbers listens you think it’s worth up to 9 maximum plays.
The problem evoked above ; fear that listening to other tracks will diminish the benefits to a music you liked but do not want to listen to again, which causes you to stop listening to music on the platform to make sure they get a bigger cut (or similarly, which causes you to keep listening to the track over and over on mute instead of discovering stuff like the kind of abuse we’ve seen on Spotify) : top up the track once or twice or however much you want so that it’s at a higher count and go back to listening to whatever.
This could be abused but not too much since value is proportional, at some point if you top up everything all the time, you’re just going to make all the songs you top up worth the price of the first listen anyway and it’ll just collapse on itself, so there’s no real benefit to overuse the feature. However, it allows us to make the difference between someone who just didn’t use the service, and someone who willfully only listened to a handful of artists to give them the biggest possible share of their monthly sub, by giving them a feature they can use to show us which music means more to them, without having to artificially listen to it if they don’t feel like it. If we really feel it needs limits, we could put a cap on how many songs can profit from the feature each month.
My personal opinion on price is we should ultimately price it at a minimum of 12€, it’s the pricing with which I get the best results in the price calculator when doing estimates. I like the idea of saying we’re slightly above Spotify and we don’t feel forced to align to their ridiculously low price point. For now, however, since our proposition is still lacking in terms of catalogue, 10€ could be fine as a direct counterproposition to bigger streaming services.
However, what I think would be an absolute necessity would be to have a “or pay as you want above the asking price”. The reason for that is twofold:
1/ It’ll mean a direct earning increase for artist, so it can be viewed as a direct support “each according to their capacity”.
2/ It’ll also mean people paying more will “own” their music more quickly, because the average price they’re paying per listen will increase accordingly. To go back to our “Explorer” type, if they decided to pay 20€ instead of 10€, they would only need 7 listens to earn a track now. The “Seasonal” listener would only need 8 plays. The “Collector” listener would only need 9. So there’s an obvious incentive for them to pay more, it’s not just support.
One thing S2O does that I think is absolutely fantastic is, to quote the “pricing” page on our website, “set a fair price on what a track can earn per listener”. This is wonderful because it’s clear to me that there’s an unhealthy pattern of mechanical and structural self-reproduction of inequalities with tracks being able to generate music virtually forever as long as people listen to them even when they have in fact paid for those songs twenty times over. It’s one of the reasons things like legacy catalog overtaking the best part of streaming royalties happen (as clearly laid out here Above The API - Streaming’s Endgame (Part One) or here New Music Abounds. But Back-Catalogs Are Driving the Music Industry - Rolling Stone and with the problems it implies clearly laid out here Mass Hipgnosis | Rich Woodall ).
However, I always had this nagging feeling that for a lot of small artists this was also actually… desirable. If you only have a small but very dedicated user base who constantly listens to your music, having them spending only once and then never again could prove catastrophic in the streaming era we’re in.
So my proposition would be to trust users (again), and to embrace the variety of ways they want to express support by giving them some margin of control over how all of this work. My proposition would be that every month, if at the end of it a subscriber successfully bought say, an album or something, the next time he plays a track from said album, there’s a non-intrusive (the song would keep playing) pop up disclaimer, saying:
“You now own this album/EP, the plays are now free, and you can download it at any time, do you want to keep supporting this artist? You can always decide later.”
If the person clicks “yes”, they can decide any amounts they want to keep supporting said artist/release that will be taken out of their subscription as if they didn’t own the track until the amount is reached. The plays would either restart at Play count 1 or at a specific price tier like 4th or 5th listen, whatever, we’d need to figure out something.
This would effectively be a way to spread a “pay as you want” feature over time for people invested in particularly niche artists (or not) without any added cost to the subscriber. Additionally letting them set up a price limit by themselves, to define on their own terms how much they want to keep supporting the artists grounds them in the reality that the money circulating on the platform isn’t in infinite supply: it’s their money that they’re giving directly to artists. If they want to give more, they can also buy now or up their monthly subscription to a higher monthly price.
I would even, personally, embrace the idea of a little monthly (or maybe trimester based so that’s not too spammy) personalized “data newsletter” that tells people how much their sub was worth in terms of “Pay as you play” so that they can switch to that model if they see that they overspent and their finances are tight, but the data letter would also show “how much more/less artists they listened to made” compared to “Pay as you play” so that they can support artists more if they feel they have the means to do it and want to keep supporting the creators they love. It could look something like the pricing page “For listeners” / “For artists”. I’m a proponent of transparency in all cases, to me it’s critical if we want to look better than other competing offers, we need to treat consumers with respect, and trust that if they can spend more they will, and if they can’t we shouldn’t necessarily assume it’s because they’re not good supporters of music and let them enjoy the service anyway, by creating an infrastructure strong enough that it doesn’t insult artist’s work, otherwise the fault is on us for being unable to strike a good balance between “providing access” and “emphasizing the value of work”, the entire friction I’m trying to address is between these two, often contradictory, propositions.
One thing I’d like to emphasize as a conclusion and as showcased in the idea expressed above, is that what I like about this proposition, is that it can in my view peacefully exist side by side with “Pay as you play”. It’s still stream 2 own, it’s still a much better offer than all other streaming services, it still guaranties “penny per stream”, and if anyone feels strongly that it’s a less exciting offer in terms of how much money they’re spending as a consumer vs “Pay as you play”, they can just use pay as you play and spend less if their listening pattern means it’s the better deal for them (or if they can spend 40€ a month on music and don’t feel any sort of anxiety toping up their credits very frequently, but that seems like extremely niche behaviors).
I know this was very long, and to be honest this is a short version, I’ve tried more extreme scenarios which I haven’t showcased here, and also I don’t know yet how the financing of the “penny per stream minima” is currently applied so this is something I couldn’t put in the price calculator as a result so this was absent of my proposition and I just assumed “it currently works”. I would actually like a price calculator that indicates how that work, so that we could virtualize having a higher threshold than penny per stream for example, because why stop there?
I’ve made the Price Calculator so that you could compare offers, try your own ideas, enter your own values (“price of the song” could be higher or lower than 1.25€, Song value could increase by more or less than a “factor of 2” each listen, “price of the subscription” could be 10€ or 12€ or whatever, there’s also an open field for “open” type of listener where you can enter weird number for more odd case scenarios) and see if you feel like it works. I think it could.
Instead of only focusing with a pay as you play version of “Stream 2 Own” for our longterm vision of what Resonate could be, I think we should contemplate a subscription version of S2O for 2023 as the core of the best possible version of a user centric based streaming model.
Pay as you play should remain an option for people who want to have granular control over their spendings / listening patterns to make sure they don’t overspend, or for people who just don’t care about how much they spend and can top up their credits anytime without feeling any discomfort. The rest of our listeners should have another option.
It’s my belief that a carefully thought out S2O approach with a few additions could actually be the answer to fix the most commonly known problems of the user centric model and make us the best and most respectful music subscription service that we could possibly think of.
Here’s a price calculator to try out some scenarios and numbers for yourself.
Thanks if you’ve been that far into this post, and I welcome any discussion on this topic.