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Seminario Ingeniería Industrial / Skander Esseghaier (U. of Manouba, Tunisia)

13:30 horas, Sala 401, Beauchef Poniente 851, Santiago.

Modalidad presencial.

Invitados

Skander Esseghaier, University of Manouba, Tunisia.

Título: “Pay Who Yoy Play”.

Abstract

Music platforms such as Spotify and Apple Music adopted a Market-Centric Payment System (MCPS) to share streaming revenues across music rightsholders. Under this framework, user fees and ad revenues are pooled across users, and musical tracks are remunerated in proportion to their share of total streams across the platform. Under MCPS, heavily streamed music receives proportionally more revenues than lightly streamed music. As a result, users with a preference for lesser streamed musical styles (e.g., jazz) find their fees diverted toward highly streamed genres (e.g., pop) to which they don’t listen to. This has raised a debate in the music industry about the “fairness” of such a payment system. In an effort to address this fairness issue, a User-Centric Payment System (UCPS) has been recently adopted by multiple music streaming platforms such as Deezer and SoundCloud. Under UCPS, revenues generated from a given user only remunerate those tracks streamed by that user. Under UCPS, a track’s Customer Share of Stream for a given customer determines the proportion of that customer’s fee that is allocated to the track. This is in contrast to MCPS where it is the track’s Share of Total Streams across all the platform’s users that determines the share of overall revenues that would be allocated to that track.

In this paper, we develop an analytical model to investigate how each of these payment systems impacts competition between record label companies and the choice of the musical repertoires they choose to promote. Our model yields interesting insights into the record label companies music promotion choices at equilibrium. For instance, we find that both payment systems yield incentives for major record label companies with comparable capabilities to promote similar repertoires. However, these repertoires differ across the two payment systems. Under UCPS, we find that record label companies promote musical styles that are closer to more popular genres across platform users. On the contrary, under MCPS, they promote musical styles that are closer to highly streamed genres, independently of the size of their fandom base. The difference between these two equilibrium promotional outcomes yielded by UCPS and MCPS grows as grows the extent of discrepancy in skewness between the distributions of users’ music preferences and their streaming behavior of music genres.

Más información: Linda Valdés / linda.valdes@uchile.cl